How to Turn Global Turmoil into a Competitive Supply Chain Advantage

Perfection is the enemy of progress. You just need to show up and start. Welcome to Supply Chain Optimizers, the show that uncovers the controversial strategies and candid stories of innovators and disruptors from some of the world's largest supply chain operations. Let's cut through the noise and optimize your logistics and supply chain one bold idea at a time. Welcome to Supply Chain Optimizers. I'm Diego Solorsano and today it is my pleasure to welcome Maria Villablanca. Man, Maria has really, really done it all and seen it all in the world of supply chain. Let me tell you a little bit about her. A three time founder, transformation advisor and nowadays one of the most influential voices in supply chain by far, bar none. She has over 29 years of experience. She has partnered with Fortune 500 Brands, Fortune 100 Brands, CXOs to turn strategy into operational reality. She's helped secure buying Atlantic people, managed change management and all what it takes to do transformations tick. Maria, welcome to the show. So excited to have you here. Thanks Diego, and way to make me sound really old by the way. You know what I mean? Like, but thanks. My apologies. Just seen it all, what can I say? Let's start with really started this conversation in the context of a report we are publishing together about traffic portraying and disruption. Very obvious question, but why is it important to talk about this report and these risks at this time? Thank you for asking that. I still think, and this could be a controversial point because maybe somebody will disagree, but I think that the reason we did this report now is because it takes a hard look at something that maybe a lot of people in the profession still underestimate, which is geopolitics. The thing with geopolitics is that it's not background noise anymore. It's properly front and center in every decision that we're making. We were talking about tariffs that can distort prices by more than 35% or port congestion that can stretch shipping times by up to 20%. These are no longer like isolated headaches, they're structural. So why are we doing this report now? Because the rules of global trade are being rewritten almost every day, and not by supply chain professionals, but by politicians, policymakers and by the planet itself. So if you're running a global supply chain or a global operation today and you don't understand geopolitics or really dive into geopolitics, you're flying kind of blind. It's very interesting that we should bring it up right now because then the follow up obvious question Is. Well, Maria, hasn't this always been a risk? What has fundamentally changed in the past number of years? Whatever time frame you want to pick that makes it relevant today and especially worth talking about today. Well, look, geopolitics has been an issue forever. We've always had wars. We've always had issues around climate change as well, and different types of policy and regulations. But the difference is that it's no longer a moment, moment in time. It's a permanent condition. And that's what I like to say. We're living through overlapping crises, poly crises. We're talking about wars, tariffs, droughts, new industrial policies, climate shocks. And they're all happening simultaneously. Well, after this settles down anymore. You know what I mean? Like when Covid ends or when this ends. And that's why the conversation really matters right now. We've moved from managing disruptions to learning how to operate inside of a disruption. That's more than just a conversational thing. It's a mindset shift. I kind of liked this concept that I read the other day that the new normal doesn't really exist anymore, right? Because it has some level of normal, right, in the sentence. The new normal is probably what we are experiencing right now, which is constant disruption, a world in somewhat of a chaos, war, climate change. And that really is not, again, normal. You know what I like to say? I like to say this isn't your granddad's supply chain anymore. This is a different time. It certainly is. We covered quite a bit in this report, and I'll have the link to download this in show notes here. But from what we chatted about, right, Tariffs, port congestion, disruption, these geopolitical risks. If you could pick just one and talk a bit deeper about it, which one would it be that changes by the day, Right? But I think if I were to think of one, it would probably be focusing on trade policy, you know, 100%, if you think about that. Tariffs tell you everything about how the world is shifting. They can reflect ideology, politics, economic priorities all in one move. One policy announcement can wipe out your sourcing model overnight. If you think about it, it's also the clearest signal of a deeper truth, that we're moving from globalization to regionalization. And if you're not watching that trend closely, you're going to wake up one day and realize that your global network doesn't actually work in the new reality. Have you seen this play out in real life? Maybe you have an example that you can give our audience of how you've seen this play out in Real life. The best thing I can say is when people ask me all the time, what does the supply chain leader or transportation or logistics leader of the future look like? I tend to say it's a combination of a different number of things. I think back in the day you had to be really good at multitasking, at organization, at agility, at lateral thinking. But I think you also need to be an economist, a geopolitician, someone who understands commerciality. So have I seen this? Yeah. I think if I look back to the profession 10 years ago, 15 years ago, it was, how am I going to get my, my goods from A to B cheaper and faster? And that was the big headache. And I'm simplifying, of course. You know, I don't want to downplay the value of the profession because it's been a tremendously valuable profession. It keeps the world moving. But I think that right now it's about the refocus of the supply chain professional to really understand so many things. So when I speak with. So the only example I can give you is the level of conversation I'm seeing at, at conferences, and I go to a lot of conferences has moved from this transportation mechanism or that product price, you know, the sourcing strategy that I'm going to use there to what is Washington D.C. thinking, what are they thinking in the EU, what kind of new directors are coming in, that kind of stuff. So that's the sense of what I'm getting from when I speak with professionals, if I understood that one correctly. It's not only that the profession itself has changed right into, you know, encompassing more of what it used to be. Not only that, but that you are actually, you're in the room with some of the top supply chain executives in the world and logistics professionals in the world. If I understood you correctly, you have actually heard the conversation shifting from oh, you know, how to bring costs down to oh, what is Washington doing, what's the policy? Right. How are things shifting from a geopolitical point of view completely. And I'm not just talking about at the higher tiers of supply chain. I'm not just talking about the cxo, the chief supply chain officer, chief operations officer. I'm talking about the person in procurement and sourcing who's thinking, you know, the decision, decisions that are being made are going to affect the decisions that I make today with regards to sourcing, with regards to transportation. There are just too many considerations that need to be taken. I guess I'm not saying that a supply chain leader right now needs to go and enroll in a geopolitics class. They need to definitely be aware of it and understand that this has a huge impact on their profession and it changes daily. It's easy to be. I'm going to use the word paranoid because certainly a changing world and we constantly read about it in the news, et cetera, et cetera. Right. Literally everything seems to be shifting by the day, and especially when it comes to shipping things around the globe. Right. Maybe some practical advice or how do you actually. If you are a supply chain professional or a logistics leader or a sourcing professional, how do you choose what problems to worry about and which to ignore? Man, Maria, there's so much noise everywhere. How do you focus? How do you choose? There's a fine line between being cautious and being and catastrophizing. No one's saying, oh my God, the sky is falling, it's over. This is the worst thing. We're not trying to say that saying is that new normal or that old normal is not coming back. This is just a new way of doing business. Okay? And although supply chain has always been disruptive or disrupted, and that's why I think we've got some of the best people in the profession because we're so agile, we're so resilient, so we've got the skills necessary to ride this. But unlike before, there was a couple of blips here and there. This is blip every day. So how do you practically choose what to worry about and what to ignore? First of all, not everything that's urgent is important. So when everything's feeling critical, you need to find a filter somehow. And so the things I know that I find effective and that other people find effective when I'm speaking with them is to use these three questions. Number one, does this crisis stop me from delivering my customer, or does this issue stop me from delivering to my customer? Number two, does it materially change my cost base? And number three, does it damage my reputation or compliance in some way? If it doesn't hit one or all of those three, it goes into the let me look at it or monitor to monitor pile. And remember that resilience doesn't mean firefighting every day. It means building systems that are strong enough to take a few hits and still deliver. And I'd go as far as saying it's building systems and people and culture and processes that are strong enough to take the few hits that and then still deliver. It's always such a pleasure talking to you because of how much knowledge you have. About this, I really like this framework on how to focus or where to focus. Ask three questions. Does this crisis stop me from delivering? Does it materially change my cost base or does it damage my reputation or compliance? And it really is all about building systems, processes and culture, training people. But maybe if we were to ask, or if I were to ask it, on the negative side, what is perhaps a common mistake that you actually see logistics or supply chain leaders and operators making? That's an easy question, but it's a hard one too. So I would say there are a lot of, of mistakes. Right. But the biggest one that I see is over complicating things. You know, sometimes people confuse complexity with sophistication. The best supply chains that I've seen are intelligent because they're simple. And I would say also the second biggest mistake is people that are flying blind. You know, too many operators still make decisions on outdated, fragmented data. You can't steer a ship through a storm with last week's weather report, really. And perhaps maybe. And this one really gets me. The most dangerous of all is complacency. Some leaders think, well, we survived Covid that makes us resilient. Box ticked. No, resilience isn't a metal. It's a muscle that you have to keep working at. It's an ongoing transformation. It's an ongoing thing. And so if, take a look at the complacency issue. I wrote a newsletter about this because I felt that the pandemic allowed supply chain leaders to come out of the shadows, into the board and start demonstrating the unique value that supply chain can give, that it's an actual value add as opposed to a cost. And I think that we got complacent and squandered that opportunity to sit on the board and drive commercial value in the business. Because we were like, okay, well pandemic's over, so let's go back to making cost based decision making. And I'll go back into my warehouse and see you later, strategy people. And goes back, I guess more to the point, especially here in complacency that you talked on the last part of your answer, it really is a muscle that you build, right. And how do you avoid complacency? I think first of all, questioning yourself and questioning what I'm doing, consistently adding value, it's so easy to get sucked into doing my job on a day to day basis. It's gotta be, how do I reinvent this? You know, am I reinventing this? Am I complicating things? Keeping in touch constantly with the people in your business that are in commercial finance understanding, am I adding value? Is this a value add? And this is a hard thing for anybody. I myself struggle with it every day. Sometimes you find yourself so busy doing the busy work, fighting the fires that it's so hard to do the strategic. And I think you have to build time to be strategic, build time to be for that blue sky thinking and for reflection. Wanted to switch gears a little bit. You've been, as I mentioned in the intro, working in the supply chain world for years. Really. My question, what keeps it exciting to you? Right, again, I've mentioned, you've seen it all right. What keeps it exciting for you? Well, you and I have talked about this. A lot of the people that I come across that are older, I think a lot of younger people study supply chain. But the older people, we all fell into supply chain one way or another. You know, we didn't necessarily go, I'm going to study supply chain. I got my first job in. It wasn't even called really supply chain. It was just operations. It was everything. It was just, you know, operations. Do a bit of procurement, do a bit of sourcing, do a bit of the manufacturing plant, receive the trucks that are coming into the yard, do the bills of lading, all of the above. What I love about supply chain really is that it's at the intersection of everything that matters. It's people, technology, geopolitics, innovation, leadership. It's one of the few fields where you can literally see the world changing in real time. One week you're talking about AI, the next you're discussing trade routes, and the next it's human rights in the supply base. And underneath it all are real people trying to solve real problem. And that's what keeps me hooked. I think we do a bad job in the perfection of advertising. How amazing this profession is. We don't shout about it. And I constantly say to younger people, look, if you want to change the world, work in supply chain. We are at the forefront of technological innovation. We're at the forefront. We're the biggest polluters in the supply chain, are the biggest polluters. If you want to change that, come work in it. You know, there's a number of amazing people. I try to even ask ChatGPT and I can't even get a straightforward answer of how many people work, work in the extended supply chain globally. There's so many people in this. It's a fascinating profession in my opinion. And if you want to change the world, jump in. Couldn't agree more. Again, you are exposed to the top thinkers about this, right? The top academics, also some of the active or retired professionals at the top of the supply chain world really have this nagging question in my head, Maria, what's a good supply chain? What do the top supply chains in the world do differently? And the context of this question is I chatted the other day with an automotive professional and his point of view was that you're not really competing with another company per se, you're really competing with another supply chain. Right? So really begs the question, what's a good supply chain? Right. What do the top supply chains in the world do differently? The top executives do differently. That's a tough one because when you think about it, when you think of the best supply chain in the world, what do you think of? Right? Or the game changer to me was Amazon. They were the first people to say, you want this product in a day? I'll give it to you. You want this product in an hour? Sure, I'll give it to you. You want it delivered to the ends of the earth. Yeah, we can make that happen. So to me, I think the gold standard of supply chain is a supply chain that never loses sight of its customer and understands that at the center of everything is its customer and that building complexity is not the right way to deliver value to your customer. So I think it's understanding, and this is one of the things I think it' is to walk your supply chain backwards from your customer and understand where are the complexities, where are the pitfalls and the bottlenecks? And I think once you do that, just simplify it and get to the fact of what does my customer want and how can I add value to them? Now, you've brought up complexity twice in this conversation. What do you mean by that? What is complexity? Right. I think it's sometimes hard to understand what simplicity in this very convoluted world of supply chain and logistics, what does simplicity mean? I'll give you an example. Complexity is sort of nonsensical, doesn't make common sense. I've had multiple conversations where, for example, someone says, we're going to optimize our procurement process, right? And so I'm going to optimize my procurement. We're going to reduce the costs and we are going to reduce the price per object bought for sku. That's brilliant, that's great. But it's a silo. What that happens then is that this person here in procurement is incentivized to buy the Cheapest good. It doesn't matter that the cheapest, cheapest good has to make three different routes to go from China back to Latin America to then back to Europe to be able to deliver. Because it doesn't matter because they got it at $0.01 per product. But what it then caused is it caused complexity. And down the line it meant that there were more pro, they had to order more products because they had to order it in bulk. They needed 100 units, they ordered 10,000 units. That created a problem where you needed to hire warehouses. You have an issue where it's no longer sustainable anymore. More then it affects the price. And so I think to me complexity is where you've got multiple drivers looking at things from their own perspective without taking a common sense step back here and saying maybe there's an easier way to do this. Does that make sense? I mean it's probably the best way that I can explain that. No, absolutely does make sense. A siloed decision with a siloed piece of information and data optimizing for their department. Whether that's logistics, whether that's procurement, whether that's planning, etc. It's just making a decision in a silo without the high level overview of how everything is interconnected. And I'll give you another example. When someone says we need to buy AI, okay, great. And they go out and they source AI, like if it was some sort of ERP and they prepare for this big, big move that they're going to make and they layer that on top of really bad processes. Really, or maybe processes that are not fit for purpose for 20, 26 and beyond. You know, a mindset shift that doesn't change. So the procurement guy is still getting motivated. The smallest, the cheapest package price and no understanding of what headaches that causes down the line. That's complexity. Too many drivers making decisions that only benefit them right here in the middle. So I think it's time to look at, for example, processes, network redesign. Is my supply chain network fit for purpose? My supply chain, the entire chain. Does it work like this for 2026 and beyond? Is my technology just layered on top of really bad processes or data or decisions? Is it fit for purpose? So I think it's complexity is what it means. It's too much stuff without a really clear definition of value. Clear definition of value and without a clear definition of decision maker and ownership, I guess is what you're also saying. Now you brought up the thing everyone talks about these days, AI, even us, right? We met a few Weeks ago in Mexico City doing the AI Logistics Conference. Phenomenal participation of you and thank you very much for being here. But you really talked to our audience about the troubles implementing specifically AI or some new technologies, but specifically AI. Could you go over some of the main arguments that you have as to why leaders struggle to implement AI? First of all, thank you for inviting me to Mexico City. It was my first time there. Loved it, loved the people, loved everything. I wish I'd spent a little bit more time there and I'll definitely be back. And then meeting everybody there was great and I really enjoyed the conversation. I stand by what I said when I was there, which is that the problem with AI is twofold. First is I don't think people really truly understand it. I think it's such a buzzword. It's sort of. They couldn't even tell you if it's the difference between AI, generative AI or analytics. And so I think there's a big misunderstanding of AI, what IT can do. That's number one. Number two is I think the biggest issue is that AI isn't about technology. It's not a technology problem, it's a leadership problem. And I think leaders get stuck because of fear. And that fear is a fear of the cost of implic implementing something like this. The fear of failure, fear for not understanding it, fear about their messy data, the lack of skills within their organization. There's also a good healthy dose of cynicism. Is this going to work for my business? Do I need to do this now? Is anybody getting any value from there? Or more importantly, things like it's just a big buzzword, you know, nobody's really using AI. I'm not ready for this. And so I think there's all this fear of this complex situation with AI without realizing that it is happening whether you like it or not, and that the companies that are pushing through, and I gave an example when I was there about Unilever, which boosted on shelf availability. They give proper examples of ROI from generative AI implementations. They're the ones that are treating AI as a business transformation, not an IT project. And that value is massive. When you think about generative AI as you move it from. From firefighting right to foresight, it's about seeing around corners. That's what generative AI does. And in a world that's volatile, that is just priceless. It's a huge differentiator. I was really going to go into. You're a leader in supply chain, you hear about it everywhere. Why would you think of Implementing this. Right. Again, there's some cynicism. There's a buzzword absolutely, like fear of cost, fear of failure, fear of the missing data. There's got to be something here, right, that people are so much speaking about this value, right? What's the value? In the first place, what could AI do for organizations? Because I know you have a lot of examples, you probably have more examples than I do. You're doing it. I think the value really is. And the example I gave, if you remember my presentation was I called generative AI the Ozempic. And it's not my take. I stole it from, from Scott Galloway, from Scott Galloway, from NYU Stern, who said that generative AI in business is kind of like Ozempic. Everyone's using it, they're just not telling you they're using it. And they're all gaining that competitive advantage. All of a sudden everyone's really skinny and looking amazing and you think, well, how in the world did that happen? And that's because they're using a faster way to reach their goals. If there was a faster way for you to reach your goals, a better way, and it's not cheating, it's just a better way for the modern era, why not use it? So I think really what's happening is that most companies are using generative AI and the case studies are slow to come by because they're a unique advantage. They're giving people that unique advantage. So where do you implement that? Well, AI loves data problems. It loves solving problems around mundane tasks. And let me tell you, we have a lot of mundane tasks. I joke about this, but when I was in supply chain, we were doing pen and paper and Excel spreadsheets. 20 odd years later, or almost 30 years later, guess what? But we are still using that. There's data deep within emails. People send emails to each other and data buried in those emails. So AI can go through that in a fractions of a second. And then when you start talking about agentic AI, the possibilities that are there where agents are starting to make better decisions and decisions with other agents. The fear of course is am I going to get replaced by AI? Well, no, it means that mundane tedium junk that is sitting in supply chain will just get done quicker and we can use our huge brain power to do things better, to add more value. So yeah, so that's, that's my view of generative AI where it adds value and where I think that everyone is using it, just not talking about it. No, and I absolutely agree. And some of our, of Our own customers. I have a very example just from last week, one of our customers telling us basically gave all this data issued to the AI, right. It's solving it for me. And I spent last week renegotiating with my shipping line. Isn't that what you want to hear? Like that's exactly the purpose, right? You don't really have to parse the information contained in a bl, right, to push it into your erp. That that's gone. That you don't really have to do that anymore. There's a lot of tedium in everybody's jobs. You know, we spend a lot of time doing stuff. I agree. It does beg the question, right. You had some very interesting slides there on how do you get started? How do you go about getting started with. In this world of AI, Maybe if you've been been in the field for years and years and it's not. You don't feel as comfortable with the technology. There's a couple problems here. The first one is people thinking I'm not ready. And I would say the first thing you need to do is stop thinking that way. You either are ready or you're going to be left behind, plain and simple. There is no in between. There is no, well, you know, I'm going to wait five years. This technology is moving at a gigantic pace. So if you don't implement this now, your replacement will be your competitor is implementing it. So you have to do it. That's number one. Number two is how do I convince people internally to do this? I'm a small company, I don't have a lot of money. You need to stop rethinking of AI as some sort of huge ERP implementation of the past. That is, that is going to take 10 years to do. And you have to create an RFP and oh my God, and I got to get my whole business ready and the data ready. This is. Change your mindset, shift it completely. You need to do small projects. That's what I would say is you need to start small. Don't wait to be ready. Pick one problem you can solve in 90 days. One measurable outcome. Outcome, one internal champion. Then build it from there. Perfection is the enemy of progress. Or as I told the audience in Mexico, you don't need the perfect gym outfit to start training. You just need to show up and start. Because in today's world, if you're standing still, that's the biggest risk of all. I couldn't agree more. And something that I do see all the time is when you have to involve your IT department to do approvals, etc. It's, it's especially, I think, hard for IT professionals to forego the SAP mentality of the RFP and the data and the, you know, long processes to get things implemented. Do you have experience navigating or seeing people successfully navigate around that or with that? I think that's first of all a mindset shift. I think people need to realize that just like cybersecurity, AI is not just it's problem, it's your problem. And you need to be very, very much aware of how to manage and operate within this field. I think that's, it's a commercial issue, you don't need involve. I mean, I'm sure companies have different types of hoops that they have to jump through, but if you see it just as a directive, I need to go tell my IT person and let my IT go in and implement the solution. You're going to lose. You need to realize that it is your problem. Sorry, AI is your problem. Let me state that AI is your problem. And so it's your problem and it's also your competitive advantage. So where I have seen IT work is where you've get one really good champion and that's usually someone within the organization that is a pioneer. And you had people like that on stage as well who were pioneers, who said, you know what, we either get on with this or we don't. And we learn as we go. You know, we learn as we go. You don't have to be perfectly. Like I said, the example of the gym outfit. If you wait to get your entire gym outfit ready before you know the right shoes with the right sneakers with the right socks and the right whatever, everything, my right headphones, I've got to get the right beats headphones, otherwise I can't work out. No, just go for a walk. Just choose something small, go for a walk. Walk to the end of the block today. That's all you need to do. And I think it's kind of like the app couch to 5K. Have you ever heard of the the app couch to 5K? Yeah, exactly. So if I wanted to run a marathon, how do you do that? One step at a time. I get off my couch first. So get off your couch, take one small step, approach people like you and say, listen, I want to use it. I don't even know where to go. How do I do this? I do agree that so much of walking this walk, having a conversation and being curious, curious, staying curious, identifying problems and having the conversations with the people that have implemented it, with experts such as you just having that conversation and as you say, right, just learn by doing. We're all figuring it out. Learn as you go. A couple of closing questions for you. First one, around technology, besides AI, what's exciting for you in terms of technology in this field? There's so much to be excited about. I like what's coming down the road in terms of agentic AI. I think that's going to be a pretty big game changer as well. Again, network redesign. I like the concept, the idea of looking at how organizations redefine their supply chains because like I said at the beginning, some of them are going from global to regional. So you need to understand your sourcing strategies and look at onshoring, near shoring. It's not just a technological conversation. What excites me about the features, the possibility of redefining things. I believe that transformation is just a question of asking yourself how can, can I do this better all the time? And relearning and unlearning. You know, I've been in this field a long time and I'm constantly asking myself, is this the best way I can do things? Could I do things a lot better? Could I do things just because I've done it this way for the past 10, 15 years? Maybe I should do it another way. So I think it's. To me, it's less about the technology per se, although generative AI and agentic and all that stuff looks really exciting. I think it's more about the prospects of redefining supply chain for 20, 26 and beyond. Maybe I should have asked this a little bit earlier, but how do you get buy in to get this kind of thing done? Now that you've mentioned this redesign. Right. And like shifting mentality, I think getting buy in is one of the most fundamental parts of technological transformation within an organization. You have to have champions within your organization. You start small. I think there's a very big misunderstanding of say, the function, function of finance. For instance, people think that finance is Mr. Or Mrs. No in the organization because all they hear is no from them. No, we don't have money. No, you're not going to spend money on this. No, we're not going to spend money on that. And that's because they completely misunderstand the fact that finance is there about risk. That's what they care about. Of course they care about money, but they really care about the risk to the business. And if there is the risk that you're not going to be competitive enough, then finance can be a very big ally ally for the organization. So I think understanding the risk involved with inaction, the risk involved with not innovating or transforming your organization. So how do you get buy in? Understand the risks within your organization, find allies and find one or two champions or at a prototype project to take over, you know, start, start small. Last question. What's one piece of advice you'd give supply chain operators, especially earlier in their career career? Network. Network. Network. Network. Because it's so easy to get sucked into your eco chamber, it's so easy to operate within your business and this is the way it works and that's that. And I think it's good to network with people from outside the profession in finance, in it, in business, in, you know, different areas, network with people like me, like you, and learn from as many people as you possibly can. I absolutely agree with that one. And it's literally the first time someone has answered this, but I couldn't agree more. Right. I do think that things really do start because of the people you know and, and it's such important skill to, to work on networking, knowing people, having the conversations, being interested is such a under the radar or underestimated quality to have as a professional. So I appreciate that answer very much. My pleasure. It's been an absolute pleasure as always. You are, you know well of wisdom in this subject. I could go on for hours and hours I apprec being here. Thank you for taking the time. No, Diego, thanks for having me. That's a wrap on today's deep dive with supply chain optimizers. If you found value in our controversial tactics and data driven stories, don't forget to hit, follow and subscribe. So you never miss an episode, have a burning question or want to share your own optimization success. Connect with me, Diego Solarsan on LinkedIn or for more information on how we can help you transform your supply chain and logistics operations, visit the steia.com thanks for listening.