Meeting consumer demand in times of uncertainty

Adrian Choo, associate professor of supply chain management

Adrian Choo, an associate professor in Michigan State University’s renowned Department of Supply Chain Management, highlights the value in managing the engine of meeting consumer demand and embracing uncertainty.

Broad News: How did you begin in supply chain management?

Choo: So, this is funny: it was kind of accidental. It was when I was a physics major at the National University of Singapore. A professor from the business school gave me a textbook on supply chain and operations. I read it and thought, “Hmm, this is kind of interesting.” So that’s how I got into supply chain later on.

I still graduated with a physics degree but did receive my master’s and Ph.D. in supply chain. I like to do things that are interesting and sometimes challenging. It’s not something I planned for, but I stumbled into it, and it thankfully worked out. And yes, I still have the textbook and I still keep in contact with the professor.

Broad News: What is the value in a supply chain, and why was it undervalued pre-pandemic?

Choo: We all know that a supply chain is basically a system of producing and delivering services and products, starting from raw materials and reaching to the end, which is the customer. When you think about it, the supply chain is essentially the engine of meeting customer demand. When you drive a car, you don’t really look into the engine; it’s behind the scenes, and you assume it’s going to work. We don’t really notice it when everything is working fine, but when it stopped working in the pandemic, people started to realize how critical it is.

Before the pandemic, supply chains were underrated because they were behind the scenes, but they have always been critical. Everyone talks about supply chains now. Even politicians say, “We need to shorten the supply chain.” People now understand a little better the value of the supply chain and talk about it.

Broad News: What is the biggest challenge facing supply chains today, and how do you think we should combat it?

Choo: Different people have different opinions. My opinion is that our biggest challenge is in managing uncertainty. Before the pandemic, there was still a lot of uncertainty, but post-pandemic there is much more. Companies that are able to manage the uncertainty better are going to be superior.

Uncertainty makes you stressed and anxious; even getting more information will not necessarily relieve all anxiety. A better, more realistic approach is to accept it. This means having contingency plans as well as making the supply chain more resilient and flexible. Things will always change, so how will you deal with it? Being innovative and creative is going to be very important in how companies handle uncertainty, but first they need to accept and embrace it.

Broad News: How do you think inflation has or will impact supply chains, and what should consumers expect?

Choo: Pretending I am an expert in inflation (which I am not), we all know that inflation will make us poorer; whatever we make will be less. From a supply chain perspective, it will be more expensive for companies to operate the same as before. From a consumer perspective, things will be more expensive.

The key questions without answers are how much more expensive things will be and how long this will last. For companies that are very good at managing efficiency and innovation, this may present a competitive opportunity. Since we are all dealing with inflation, being efficient, innovative, reducing waste and managing supply chains can drive down costs, which are a differentiating factor for consumers’ preferences, especially during inflation.

Broad News: Companies are often mentioning goals of becoming “carbon neutral” or “net zero,” and some have deadlines of 2035. What must a supply chain do between now and then to reach these sustainability goals? How will this impact the consumer?

Choo: I would think companies with these sustainability goals are leading the sustainability efforts. The question is, can they bring their supply chain partners together to reach the same goals? It might be easier (though still challenging) to get the first-tier supplier to join the initiative given the relationship built, but what about the supplier’s supplier? If more and more companies focus on sustainability, it will grow more common and the field will level out. Companies will go down the learning curve and realize that it is possible to be efficient, sustainable and profitable, which is why we focus on the triple bottom line (social, environmental and economic).

The consumer is also facing a similar situation: Are they willing to pay more for a sustainable good or service? In reality, we are seeing major environmental concerns and natural disasters. Consumers are noticing this and shifting to sustainability. Sustainability should not be thought of as a trade-off to cost; it should be thought as part of the total long-term cost: we either pay now or pay much more in the future.

Broad News: What is your favorite aspect of being a part of the Broad community?

Choo: The people. The students, faculty, staff are fantastic. We have a really solid group of people; both the students and faculty are very talented and motivated.

Broad News: Do you have a piece of advice for those in the MBA program or looking to begin the program?

Choo: Here’s one short phrase for those prospective students. I’d like to use the Nike slogan: Just do it.

For those who are in the program: I believe in working hard but also enjoying and playing hard. Otherwise, you cannot sustain stress. No matter where you go, there will be stress, but what you need to remember is that you need to work hard, it’s not impossible, and you should enjoy it at the same time. Secondly, if you need help, don’t stay quiet. Many people are willing to help — just ask.