Davos WEF 2022 Editor's Notes: Wanted – Flexibility In Supply Chain Of Goods And People
Follow this daily blog by BQ Prime’s Managing Editor Menaka Doshi for all that you must know from the 2022 WEF Annual Meeting.
Charles Darwin said it first. Be flexible (I paraphrase). It now needs to be the mantra of the modern corporation–for sourcing of inputs to employee work hours.
“The lasting legacy of the pandemic is going to be an increased expectation for the individual for more flexibility,” Jonas Prising, chairman and chief executive of ManpowerGroup, told me on what’s a blistering cold, windy morning.
The world is witnessing the highest talent shortage in 15 years, according to a ManpowerGroup survey. Prising attributes this to pandemic-related impacts and long-term structural trends in birth rates and demography. Tight labour markets have meant higher attrition and higher wages ... though not evenly across all industries. Retaining talent involves resolving the reskilling challenge, bringing women back to the workforce, recognising worker rights and maybe even moving to four-day workweeks.
‘The Future Of Work’. Watch the Jonas Prising interview here.
ManpowerGroup Chairman and CEO Jonas Prising, at an interview, in Davos, on May 24, 2022. (Photograph: BQ Prime)
Shipping containers remain in short supply too.
It takes over four months for a ship to reach Rotterdam from India against 30-45 days in the past, says Neeraj Kanwar, managing director of Apollo Tyres. Freight rates have not only doubled but gone up five to seven times, he said. Customers want suppliers located closer by, or a more flexible supply chain. Apollo has plants in Europe to step in and fill the gap.
Apollo Tyres Managing Director Neeraj Kanwar, at an interview in Davos, on May 24, 2022. (Photograph: BQ Prime)
But flexibility costs.
Mahindra & Mahindra was hard hit by the semiconductor shortage because its key supplier, an ST Micron plant in Malaysia, shut down during Covid-19.
“We’ve been in the mode of just-in-time inventory, we've been in the mode of single-source to lower cost. Now all of those things are being looked at. How do we plan for eventualities,” poses Anish Shah, managing director at the Mahindra Group.
“Having ‘what if’ scenarios addressed effectively means you need back-ups in place. Back-ups have a cost and that’s something that companies do have to plan for. And they’ve got to get much smarter to assess what are the optionality plays.”
Mahindra Group MD and CEO Anish Shah, at the WEF 2022, in Davos, on May 24, 2022. (Image: BQ Prime)
Read more from BQ Prime at Davos 2022:
→ SBI’s Dinesh Khara Sees Lending Rates Rising By 40-90 Basis Points
→ Bharat Forge Has A Capital-Lean Strategy For New Verticals
→ Unilever CEO Says The Idea That Sustainability Is Costly Needs To Go
→ Interest Rates May Reach Pre-Pandemic Levels By August, Axis Bank CEO Says
→ Neeraj Kanwar Says Supply-Chain Logjam, Coal Shortage Major Problems
→ Anish Shah Says There Will Be A Cost To Reconfiguring Supply Chains
Menaka Doshi is Managing Editor at BQ Prime