The BANI era is here—and a data-driven supply chain has never been more crucial
Article｜2024-11-11
10 minute read
The tide of "digital Darwinism" is sweeping the global society and economy. If Charles Darwin, one of history’s most revered naturalist, applied his theory of evolution based on the survival of the fittest to today’s business landscape, he would see a world in which companies that lag behind in responding to irreversible technological evolution may lose their competitiveness at an accelerating rate. After all, survival isn’t guaranteed.
As a company that both creates and uses technology, Fujitsu is rapidly advancing digital transformation (DX) efforts that transcend national, regional and departmental boundaries. Linking DX to sustainable growth means that we are also working on company-wide reforms and pioneering new growth areas.
In this article, Takashi Yamanishi, Corporate Executive Officer, EVP, CSSO (Sustainability & Supply Chain), will provide a comprehensive overview of how data and technology are being used across supply chains, improving resilience and addressing decarbonization, while addressing the governance practices and challenges required for global supply chain management. DX is a collaborative effort that dramatically increases corporate value. Let’s take a look at examples from Fujitsu’s own efforts to learn about the possibilities it can bring to your organization.
The role of supply chain in the BANI era
The state of the global economy and society point to the conclusion that we are now entering the era of "BANI."
BANI is an acronym for brittle, anxious, non-linear, and incomprehensible. Coined by Jamey Cascio of the U.S.-based think tank, Institute for the Future (IFTF), this keyword reflects the issues of the modern era—in terms of business, the existing frameworks and paradigms are fragile, and there is growing anxiety about sticking with the status quo. This is the era of unpredictable (i.e. non-linear) changes and innovations occurring on a regular basis, and there are many incomprehensible issues that cannot be addressed by conventional thinking.
Given the new realities of the BANI era, the roles and responsibilities of corporate supply chain functions have become far vaster. Amid increasing pressure to disclose non-financial Environmental, Social, and Governance (ESG)-related information, the transparency of supply chains and the evolution of ESG initiatives are key factors in determining the value of sustainability management.
Fujitsu has established a framework called Global Responsible Business (GRB), which contains six categories that clearly demonstrate the ideal approach to sustainability management. Supply chain is one of them, setting targets for human rights, reducing Greenhouse Gas (GHG) emissions, and ensuring diversity (Figure 1).
Planning the ideal supply chain in response to changes in the business environment; establishing KPIs that lead to an ideal state; drawing a big picture of the supply chain and enabling the ability to flexibly redraw it as priorities change. We believe that these practices will help enhance the role of the supply chain in the BANI era and the differentiation of corporate value in the market.
Technology investment in the supply chain accelerates growth
A U.S.-based software company called Cleo surveyed 301 executives from companies in the U.S. and Europe for its 2024 Ecosystem Integration Global Market Report (*1). When asked what caused the companies to fail to achieve their 2023 management goals, 41% of respondents answered, "supply chain disruptions," second only to "inflationary economy" (49%). On the other hand, 97% of those surveyed invested in supply chain technology in 2023, and 80% of those surveyed reported that their revenue increased in the same year that they invested.
Data quality is critical to the growth of technology investments. That was how around 300 supply chain experts from companies around the world responded in the Digital Supply Chain Planning Outlook 2022 (*2), which was conducted by the Council of Supply Chain Management Professionals (CSCMP), an international association of supply chain management experts, and the U.S.-based software company toolsgroup. When asked what obstacles impede the implementation of a DX plan in the supply chain, the percentage of respondents who answered "data quality or data shortage" was 41%, up about five points from the 2021 survey.
What is important is to objectively evaluate and analyze where deficiencies exist in the current supply chain and what technologies can be used to optimize cost efficiency. Steady investments in data and technology, even in the face of fierce competition, can create long-term value and turn supply chains into strategic assets that drive differentiation from competitors.
A visualization approach enabling a data-driven supply chain
What effect does supply chain as a strategic asset have on companies? Let’s take a look at the four major benefits of supply-chain reforms required in the BANI era (Figure 2).
The first is hypothesis testing to strengthen ‘just in case’ resilience. The second is sustainability and ESG compliance. The third is the enhancement of cybersecurity risk management. The fourth is data sharing and utilization across industries, countries and regions. A data linkage infrastructure is essential in achieving the aforementioned three benefits at a high level and to elevate the supply chain into a strategic asset.
Visualizing the risk of change
What’s the best way to approach impactful supply chain transformation? Here are some examples of Fujitsu's efforts in various fields.
First, we had to address the risks posed by changes in the external environment. Take a disaster as an example. In the case of the product supply chain, we are working with suppliers to establish a data infrastructure that matches the status of each process at each manufacturing site with disaster information. This makes it possible to obtain information at an early stage, such as where damage has occurred, the estimated time to recovery, inventory availability, the feasibility of alternative measures, and what kind of impact it will have on which customers.
In the past, data based on information gathered ad hoc was compiled into spreadsheets, and in the event of a disaster, we contacted business partners—it was a very analog process. By leveraging our database, we can significantly reduce the time it takes to identify impacts and take recovery actions, which in turn enables us to quickly analyze and understand the impact on Fujitsu's financial objectives.
Visualizing GHG
In collaboration with around 20 suppliers from the fall of 2024, Fujitsu will trial an initiative to share actual emission data on the blockchain using a traceability platform called Fujitsu Track and Trust.
In this trial, we will improve accuracy when sharing emissions data, and then proceed to the stage of answering questions about what can be done to reduce emissions and how much reduction is possible by changing materials. We will also aggregate the collected data into a cloud platform. Fujitsu uses this information for calculations including Scope 3, and is considering ways to contribute to net positivity and use it for financial and non-financial indicators.
There are two key areas of standardization: One is IT standardization and the second is the standardization of calculation standards. I think that getting "fit to standard" to take root is a common challenge for companies upstream in the supply chain.
Visualizing cyber risks
Business partners with access to information on our systems have agreed to uphold security requirements. On the other hand, we need to have an objective grasp our customers’ tolerance level. Therefore, we are developing a system and utilizing solutions to diagnose and improve the security measures and vulnerabilities of suppliers. Collecting a variety of public information on the Internet, extracting information about research companies, analyzing risks, and presenting security levels and improvement plans will help raise the level of preparation for cyber-attacks across the supply chain.
Data infrastructure and three visualization models create greater supply chain value
Data linkage is at the heart of supporting the visualization of "change risk," "GHG" and "cyber risk." Fujitsu is working on a project called One ERP+, which aims to standardize data globally (details of the project are given in the next section). We believe that the value of the supply chain as a strategic asset will be further enhanced by visualizing the risks of change, GHG, and cyber activity, and establishing a foundation for data linkage.
Supply chain management at facilities worldwide
Implementing a data-driven supply chain also requires restructuring governance and data infrastructure within the group. Let’s look back on our supply chain management transformation focusing on the organization and governance of facilities worldwide.
Matrixing procurement fields and countries/regions as a starting point for organizational and governance reform
About 10 years ago, Fujitsu's procurement organization didn't even have a common language. Each region had different reporting lines, no common suppliers, and no set purchase prices.
To grasp the overall picture, we worked on creating a matrix of procurement fields across countries and regions. We divided teams into categories and weighed our options about switching to the most effective procurement method. We identified areas in which standardized global negotiations would be beneficial for both Fujitsu and our partners, then established KPIs for each area and took steps to implement them.
In 2018, we decided to review the system in which procurement organizations in all regions are under the direct control of the reporting line of the Head Office General Manager. In parallel with global operations, we also reformed domestic Group companies in a similar manner. The resistance to these efforts was huge. We had to carefully investigate where the “win-win” scenarios were and steadily act on them one by one. We started with organizational integration, unified policies, and then standardized rules and unified approaches to suppliers. That laid the foundation for proper governance.
Moving forward with data standardization
In October 2024, Fujitsu launched One ERP+ (Figure 3), a company-wide project aimed at bringing about data-driven management. We have finally reached the stage where we are truly data-driven within Fujitsu. But waiting for One ERP+ to begin organizational integration probably wouldn’t have been possible. Instead, I feel that the outline of a major change was formed by drawing up a picture of the organization as it should be and moving forward step by step without hesitating.
Conclusion
I was stationed in the United States in the 1990s when I turned 30. I joined the local procurement organization and when I got to work, I could clearly envision a "fit to standard" approach. The rule about following the manual to be more efficient does not apply in the BANI era. Global teamwork will not work well, even if data infrastructure and technology are put in place to eliminate instability—unless "fit to standard" is used to restructure organizations, governance, and structures, while changing our mindsets and the way we work.
Fujitsu has ready access to the latest solutions. We can also give feedback on how easy or difficult it is to use. We have a multifaceted supply chain including hardware, software and more. By sharing the strengths and weaknesses of emerging technologies, as well as the criteria for determining the benefits and losses of each customer, along with Fujitsu's practical knowledge, we will continue innovating to contribute to the development of a better society.
Takashi Yamanishi
EVP CSSO (Chief Sustainability & Supply Chain Officer), Fujitsu Limited
Takashi Yamanishi joined Fujitsu in 1989, with his primary focus being procurement from global vendors in areas such as software and semiconductors. He oversaw the global integration of procurement and supply chain management organizations as General Manager of the Global Supply Chain Division in 2018. Afterwards, in parallel with the shift to services within the business portfolio, he helped strengthen alliances with key partners while reforming procurement and supply chains. He assumed his current position in 2024.
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