Climate change, Ukraine war, COVID crisis incl. impact on supply chains and logistics routes when Shanghai-Port closes, growing hacker attacks, changing dynamics and rapidly changing demands in consumer behavior, war for talents. Companies are facing multiple challenges. Is this a result of external events that need to be managed or are there commonalities in all these challenges that require a change in management? We discussed this question in a small, exclusive circle with executives from medium-sized companies in various industries in the DACH region. The result: complexity and tasks are heavily increasing and require a change in the data basis for corporate management.
The objective of the DataValueThinking network is to address and further develop topics and trends relating to data. The focus is not so much on technical issues, but rather on how data are used in management and influence management decisions. Application areas in the context of the use of data are value creation as well as data monetization. In the course of ESG orientation / positioning, we create added value for companies via quantification and management of ESG goals. As a result, DataValueThinking offers creative and orientation workshops as well as consulting for the further development of the data culture and the use of data.
In this context, we repeatedly examine current management topics and trends regarding their relevance in terms of data and analysis methods. Currently, we increasingly observe the topic of “resources”, whereby we define this broadly by also considering aspects such as human resources and liquidity.
Currently, many companies are focusing on crisis management and strengthening their resilience. Nevertheless, in detail all the activities to relate with these external events focus on one thing in particular: the use of resources. Here, energy management, raw material cycles, re-use, but also the control of supply chains as well as the management and development of the resource “human capital” are considered. In essence, it is always about the impact on the various resources that a company needs to create its products or services.
At the beginning of the workshop, we discussed whether the management of resources is a slight change in “business as usual” or a new trend that requires not only a rethinking of corporate strategy, but even a restructuring of the entire corporate management.
The various observations, experiences and assessments were exchanged among the executives. The conclusion: many of the effects to which companies are currently exposed were not classified as something fundamentally new but are the familiar mechanisms of an incipient economic downturn. Here, the participants also shared the assessment of an IFOR analysis on the scarcity indicator for raw materials. (Source: https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Industrie-Verarbeitendes-Gewerbe/materialknappheit-industrieaktivitaet.html#:~:text=Materialknappheit%20kann%20die%20Entwicklung%20der,und%20Vormaterialien%20betroffen%20zu%20sein)
However, the participants also agreed that due to stronger global supply chains and partnerships as well as the growing dynamics of the markets (and of activities in society in general), management requires changes. There is a need for more flexible and faster activities as well as for more agile decision-making. In this context, scenario techniques are increasingly being used to evaluate the various alternatives and to be prepared for contingencies. Regularly thinking through of extreme scenarios is also being used more frequently to strengthen the company’s resilience.
Within the topic of supply chains, it was noticeable that companies must increasingly keep an eye on the resource situation along the entire supply chain, including further processing by customers. It was reported, for example, that the shortage of certain raw materials for further processing at customers has led to order cancellations. Other companies reported that they support critical, smaller suppliers in their resource management and purchasing to avoid failures in their own production. This implies a much greater control and management effort within the supply chain, with a further increase of complexity due to emerging ESG guidelines such as the Supply Chain Act and the required energy balance sheet. In addition to the availability of resources per se, growing price volatility must also be managed.
In the area of human resources, companies are faced with growing competition for skilled workers. This is not just about specialists, such as IT staff, but also about personnel in the non-academic sector, such as truck drivers, administrative assistants, service personnel, etc. In this context, it should be emphasized that other motivational factors apply in this area than the often-mentioned New Work – topics such as purpose and agile leadership. In addition to salary, the focus here is also on aspects such as occupational health and safety. In this context, companies are increasingly confronted with intra-industry competition. Truck drivers are becoming streetcar drivers, service staff in the catering sector are moving to the care sector, and so on.
All these issues must be managed. However, the diversity, dynamics and growing interdependencies within the networked economy are increasing complexity by leaps and bounds.
When asked about the data basis to support these management tasks and enable decisions based on data, companies see themselves as only partially equipped. The data are available in the company, but in different systems and in some cases cannot be analyzed immediately. Furthermore, the data are not available with the right timeliness. In particular, to control the skyrocketing energy prices, consumption values from the last energy bill are often used, which makes timely management and control difficult. Here, targeted action by companies is required to improve the database without simultaneously initiating a large BI or data warehouse project.
In summary, companies seem to have the resource situation (material and personnel) constantly on the agenda in their management bodies and regularly evaluate the situation in scenarios. In doing so, the entire value chain must be considered, and it must be considered that resources that are often classified as commodities can lead to bottlenecks all at once. Dependencies must be identified and reduced as far as possible. These tasks must be supported by an up-to-date and flexible database.
You want to learn more about the topic of resources and data? We also offer individual workshop and consulting formats on other topics and current management challenges. Feel free to contact us.