Supply Chain Roundtable: Academics, Agility and Accountability
With fall semester commencing at colleges and universities, supply chain management majors are back hitting the books, preparing to enter a field that is sure to change greatly before they receive their diplomas.
Heck, on some days, it feels like the world of procurement and logistics could look quite different before the next dorm party or football game. The monthly roundtable of experts from Institute for Supply Management® (ISM®) can relate, as geopolitical and economic uncertainties continue to impact day-to-day procurement decision-making.
This month’s roundtable session ends with a lunchbox pep talk for current supply chain scholars. Along the way, the discussion focuses on risks stemming from the continuing conflict in the Middle East, the squeeze that higher prices and financing costs are putting on capital expenditures (CapEx), and the visibility and teamwork necessary to combat forced labor.
The panel:
- Stacey Taylor, MBA, vice president of procurement at Ocean Spray Cranberries, Inc. and Chair of the ISM Board of Directors
- Michelle Rohlwing, MBA, ISM Manager, Product Development, Innovation and Learning
- Teresa O’Brien, ISM Senior Faculty Member, Product Development and Innovation
- John Atasie, MBA, managing partner at J5 Global Synergy Group, a business and supply chain consultancy in Austin, Texas, and member of ISM’s Strategic Sourcing and Supplier Relationship Management Committee.
Q: With the conflict in Iran exposing vulnerabilities that go beyond direct suppliers and shipping routes, what actions should procurement organizations take to “risk-proof” their supply chains without simply adding unnecessary cost and redundancy?
Atasie: The strategic shift we’re seeing is from blanket redundancy to precision resilience. Organizations can’t afford to add inventory or duplicate suppliers everywhere, so the first step is understanding where the greatest vulnerabilities exist. That means identifying critical categories and supply chain nodes, mapping dependencies beyond Tier 1, and assessing geopolitical, logistics and supplier-concentration risks.
From there, organizations can use scenario planning and predictive risk analytics to determine where dual sourcing, strategic inventory buffers, alternative logistics corridors or nearshoring make economic sense. The objective isn’t to eliminate risk — that’s simply not possible. It’s about building visibility, optionality and agility into areas where disruption would have the greatest business impact. Ultimately, resilience must be targeted, data-driven and financially disciplined, so organizations can respond quickly when disruption occurs without carrying the permanent cost of unnecessary redundancy or excessive inventory.
O’Brien: Risk-proofing begins with visibility, not inventory. Many organizations have mapped their Tier-1 suppliers but still lack insight into Tiers 2 and 3 dependencies, where the biggest disruptions often originate. Procurement teams should leverage supply chain mapping, predictive risk monitoring and scenario planning to identify concentrations of risk before they become shortages. Rather than funding broad redundancy, organizations can selectively qualify alternate sources for critical materials, collaborate with suppliers on contingency plans, and establish risk-based inventory strategies that align investment with actual exposure. The goal is resilience through intelligence and agility, not simply carrying more stock.
Taylor: I agree with John and Teresa the answer is not more inventory, more suppliers or more cost. It's better visibility, governance and agility. Rather than building expensive redundancy everywhere, organizations should focus on segmenting risk. This means identifying the truly critical products, ingredients, components and services that would disrupt operations if unavailable, then developing targeted contingency plans for those areas. Organizations that already have clear processes for assessing trade-offs, reallocating supply and responding to disruption are able to move far more quickly when geopolitical events occur. Finally, risk-proofing is about creating resilience through optionality. The goal is not to eliminate risk, which is impossible, but to build an organization that can absorb shocks and adapt quickly without fundamentally changing its cost structure.
Rohlwing: Procurement organizations should focus on understanding hidden dependencies across lower-tier suppliers, energy markets, logistics networks and critical materials. The goal is to build flexibility through better visibility, proactive risk monitoring and contingency planning, so the organization can respond quickly when disruptions occur without significantly increasing cost.
Q: The ISM® Services PMI® Report for July indicated inflation and higher financing costs could shrink the expected purchasing power of capital expenditures. How can procurement organizations rethink capital spending decisions to get the most out of limited cash?
O’Brien: Procurement should shift the conversation from acquisition cost to total value delivered. Organizations can prioritize investments that drive productivity, automation, risk reduction or revenue enablement while delaying projects with less strategic impact. In addition, procurement can help business partners evaluate leasing, phased implementation, supplier financing or shared-service models that preserve cash while delivering needed capabilities. In an uncertain environment, the most successful capital investments will be those that improve operational flexibility and generate measurable returns quickly.
Rohlwing: Rising prices and higher borrowing costs mean organizations need to be more careful about where they spend their money. Instead of putting projects on hold, organizations should focus on investments that will provide the biggest benefit, save money, improve efficiency or solve overall business problems. It is also a good time to look for ways to (1) get more value from existing equipment, (2) negotiate better terms with suppliers, and (3) consider lower-cost alternatives. The goal is not just to spend less, but to make every dollar count.
Taylor: Love my peers’ thoughts here, as best business case value earns the right to have the money spent on it. Procurement needs to share with the business on how cross-functional synergy allows the organization to win. Also, supplier financing can be a huge win (if it makes sense) when capital dollars are limited.
Atasie: The July Services PMI® highlights an important tension: Demand remains resilient, but rising prices, financing costs and input costs are reducing the purchasing power of planned capital expenditures. This requires procurement to move beyond simply negotiating the lowest equipment price and become a strategic partner in capital allocation. That means challenging specifications, applying TCO and life-cycle analyses, standardizing equipment, consolidating demand, and exploring alternatives such as refurbishment, leasing or as-a-service models.
We’re also seeing organizations prioritize asset productivity over asset ownership and sequence investments into smaller, modular phases rather than committing to large upfront expenditures. Ultimately, CapEx should be managed like a portfolio — continuously optimized, rigorously prioritized, and tied directly to value creation. In a constrained capital environment, the question shouldn’t simply be: How much can procurement save? Rather: Where does the next dollar of CapEx create the greatest enterprise value?
Q: The July/August issue of Inside Supply Management® affirmed that fighting forced labor is a team sport; while AI can flag hidden risks, visibility doesn’t equal remediation. What can companies do to turn risk intelligence into action with suppliers and other supply chain partners?
Taylor: You need an active partner — and there are many in this space — that not only provides perspective into a supplier’s operations and controls, but also completes a labor audit on your behalf and works with you and the suppliers on corrective actions. This allows you to showcase your ability to trust but verify.
Atasie: AI and supply chain analytics can identify hidden risks, but visibility is only the starting point. A red flag creates value only when it triggers accountability, corrective action and a behavior change. Organizations need clear escalation pathways connecting procurement, legal, compliance, sustainability and operations, with defined supplier expectations around traceability, corrective-action plans, and evidence of remediation. Those expectations should also be embedded throughout the supplier life cycle, from supplier qualification and contracting to category strategies and ongoing performance management.
But this cannot simply become another audit or compliance exercise. Organizations need to collaborate with suppliers on root causes, capability building and improvement plans, while using third-party validation and traceability technologies where appropriate. Ultimately, the shift needs to be from “detect and report” to “detect, engage, remediate and verify.” The real measure of success isn’t whether we identified the risk, it’s whether we changed the behavior and prevented it from recurring.
Rohlwing: Identifying forced labor risk is only the first step. Companies need to work with suppliers to address issues, create corrective action plans, and improve transparency across the supply chain. The real impact comes when procurement, suppliers and other partners work together to solve problems, track progress, and prevent issues from happening again, rather than treating it as a one-time compliance exercise.
O’Brien: Technology is effective at identifying potential risks, but lasting change requires engagement. Organizations should establish clear corrective-action processes, communicate expectations through supplier codes of conduct, and work collaboratively with suppliers to address root causes. Procurement, legal, compliance and suppliers must align on accountability and timelines. Mature organizations view risk findings not as a compliance exercise but as an opportunity to improve working conditions, strengthen supplier relationships and create a more transparent supply chain.
Q: With school back in session, you’re composing an inspirational lunchbox note for a student majoring in supply chain management. What does it say?
Rohlwing: You picked a great field. Every day, supply chain professionals solve problems, help businesses succeed, and keep products moving around the world. Try to learn something every day, and you can do hard things!
Atasie: Every great supply chain leader started where you are today. Stay curious, determined and ready to solve problems others haven’t even noticed yet. Be inquisitive, keep asking questions, and learn to connect the dots between people, suppliers, technology and possibilities. Remember, supply chain is where strategy meets the real world. The world runs on supply chains, and the challenges you solve today could help shape how it works tomorrow. Keep learning, keep growing, and keep moving forward — you could be one of the leaders who changes how the world evolves.
O’Brien: Every product has a story, and one day you'll help write it. Stay curious, ask questions, solve problems and never underestimate the impact of connecting people, ideas and resources. The world runs on supply chains, and the future is waiting for innovators like you. So, make it a great day!
Taylor: Embrace the change. Supply chain is a career where you have a different experience every day. P.S.: I moved your cheese; hope you can find it!
(Photo credit: Getty Images/Brycia James)