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 affiliations and the content of this article are valid as of the date of its original publication.

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.

The Fujitsu Group will create a responsible supply chain that takes into consideration human rights, health and safety, and the environment, while also ensuring diversity. Goals for FY2025/Preventing and reducing human rights risks.Create a system that prevents problems from arising by promoting visualization of suppliers and identification of issues in parallel with requests for compliance with procurement guidelines/Promoting GHG emission reductions/Request major suppliers to set numerical targets in line with international standards in order to jointly promote GHG emission reductions. Ensuring supply chain diversity Establish diversity indicators and activities based on the social needs of each region and country Create a system to measure the status of supplier initiatives, centered on activities in Japan for the empowerment of women/Major achievements in FY2023/Released new procurement guidelines; obtained written consent to guidelines from around 60% of major suppliers/Set emissions reduction targets for around 60% of major suppliers/Achieved procurement KPIs in the UK, Americas, and Oceania from companies with a diverse set of attributes.Asked companies to register in the Ministry of Health, Labour and Welfare's “Database on Promotion of Women's Participation and Advancement in the Workplace,” with around 90% companies registering

Figure 1: The supply chain and ESG are closely related (Fujitsu's vision and goals as a GRB)

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.

Loading component...

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.

Loading component...

Artificial Intelligence (AI)/Internet of Things (IoT)/Block Chain/Cloud/Robotic Process Automation (RPA)/Resilience to achieve “just in case” through hypothesis testing/Quickly simulate the impact of logistics disruptions and natural disasters, and change plans in a timely and appropriate manner./Sustainability and ESG compliance/Ascertain the status of GHG emissions and ESG responses, and implement appropriate measures for the future./Sophistication of cybersecurity risk management/Establish a system to respond quickly to cyber attack incidents and reduce the damage of lost opportunities and loss of trust./Sharing and utilization of data across industries, countries and regions /The foundation for achieving the above three benefits at a high level and elevating the supply chain into a strategic asset

Figure 2: Incorporating data infrastructure and various technologies can make the supply chain a strategic asset

Loading component...

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.

Loading component...

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.

Loading component...

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.

Loading component...

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.

Loading component...

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.

Loading component...

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.

Loading component...

One Fujitsu/Real-time management through rational and prompt support in decision-making/management decision-related materials obtained in real time.Future prediction information for decision-making obtained through digital twin/Data visualization that maps end to end management resources/Data and visualization of people, products and finance.Linking data of the overall business processes/Business operations standardization on a global level/Standardized KPI, process, rule, code and system.Standardized output that can be obtained anywhere and by anyone

Figure 3: One ERP+ aims to raise the level of data infrastructure within the Group

Loading component...

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.

Loading component...

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.

Loading component...

Related Information

Dynamic Supply Chain Management

In today’s global environment, flexible and swift responses to unprecedented challenges are essential. By anticipating risks in complex supply chains, we ensure accurate information, preparedness, and quick decision-making when risks arise.

Cars pass over the bridge against the backdrop of the city and the sea.

From data silos to enterprise visualization: unlocking the full potential of your data

Maximize the potential of manufacturing data by breaking down silos and achieving enterprise visualization.

An image with a circular light pattern spreading on a dark background.

Loading component...

page top