Teaching leadership: How to reach non-supply chain audiences
Supply chain professionals with backgrounds in engineering or business often struggle to reach nonquantitative thinkers. One way they can make their presentations more persuasive is to include "human elements."
Bruce C. Arntzen is the executive director of the supply chain management program at the Massachusetts Institute of Technology (MIT) Center for Transportation & Logistics.
New hires from top supply chain programs are often expected to be powerful change agents in their new companies. In large organizations, this task of "go make change happen" requires persuading many people of all "different stripes" to change their behavior and adopt new practices. It can range from convincing buyer-planners to give up their beloved spreadsheets and use the new enterprise resource planning (ERP) software to persuading the vice president of sales to change the incentive system to smooth out the end of month order spike. Or convincing the marketing organization to regulate the introduction of new stock-keeping units (SKUs).
Many or most of these people will be "regular" (nonquantitative) people. Perhaps they studied the arts, humanities, literature, music, history, or other fields and ended up working in planning, sales, marketing, distribution, or a dozen other jobs. By contrast, most top supply chain students were industrial engineers, supply chain majors, math majors, or business majors as undergraduates. These are quantitative/logic-based disciplines. Data is gathered. Calculations are performed. Significance is tested. Charts and graphs are created. Business cases are presented. Graduate education in supply chain management takes this even further with more sophisticated modeling tools, data-based analytics, and now artificial intelligence and machine learning. When do we get around to teaching our best and brightest how to talk to "regular people?" The answer often is: We don't.
Because we don't, our graduates have a much harder time than necessary gathering broad support for change programs. Charts, graphs, and spreadsheets by themselves won't close the deal in generating excitement around change. For many people, a well-timed emotional argument can shoot down an analysis that you spent weeks preparing.
How Humans Communicate
At the Massachusetts Institute of Technology (MIT) Supply Chain Management Program we have invented four leadership workshops to fill this gap. The workshop described here teaches quantitatively minded students how to use what we call "the human element" to connect with a large audience of regular people.
The human element is based on the fact that when humans talk to each other we do so much more than listen to the words. We watch the facial expressions and see excitement or fear or joy. We listen to the volume and intonations of the voice and hear urgency or empathy or anger. We see hand gestures and body language. When these are all in synch, such as an angry face, words, voice, and gestures, it delivers a powerful message that sticks in the mind. However, in most business documents and slide presentations, we use only charts and graphs and sterile words, disembodied from any person, face, or voice. Without a human element, much of the power of the message is forfeit.
There are two ways, however, that you can incorporate a human element into your business presentation:
1. Use photos of human faces. Human beings like to look at other human faces. The next time you go to the airport, pause in front of one of those large magazine stands and look at the covers. You will see that almost every magazine has a person's face on the cover. Humans find faces very interesting to look at.
2. Use quotes that come from a specific person. Human beings seem to process words differently and retain the statements better if they appear to be a quote coming directly from a specific person. (Please note this is just an observation from my own experiments in the classroom and professional life, I am not pretending to be a psychologist.)
The natural human behaviors of reading faces and connecting quotes to faces can be exploited when giving a speech or making a presentation to both hold the audience's attention and to get our points across more successfully. How do I know? Because I tried it.
In 2009, at the bottom of the last recession, I gave a presentation to a regional supply chain management conference on the "Recession-Readiness of Supply Chains." The talk reviewed the history of stock market crashes and the effects of recessions on supply chains, and it explained many good and bad business practices related to recessions. I was well prepared. The 50 slides included dozens of charts, graphs, statistics, tree diagrams, and text slides. The audience seemed to understand the points, applauded, and shuffled on to the next presentation.
In 2017, after eight years of recovery and fearing that the next crash was imminent, I was asked to return to the same regional conference and give the same presentation. This time however, I included the human element. I still had 50 slides, but most of the charts and graphs were removed. Instead, the key messages were delivered by people. I searched databases of images for pictures of people whose appearance and facial expressions perfectly fit the quote and message that I was assigning to them to deliver. I found pictures of people who looked like a CEO, a CFO, a vice president of purchasing, several sales people, a human resources manager, a country manager from France, an administrative assistant, and many more.
For honesty's sake, I told the audience that the pictures of people and the quotes assigned to them were not real. Nevertheless, the parade of human faces and their lively quotes kept the audience enthralled the whole time. Furthermore, the business messages were very well received as evidenced by the heads nodding in agreement in the audience. At the conclusion, half of the attendees came up to the front asking questions, shaking hands, and thanking me for the presentation. It was exactly the same message as eight years earlier—except it was delivered with the human element.
People, faces, and quotes
In a slide presentation or a journal article, we cannot reproduce all of the body language, intonations, hand waving, shouts, and emotions that one sees in a real human encounter. But we can at least show a photo of the speaker's face and some gestures that reinforce the message that they are delivering. The quote backed up by the photo makes the business message much "stickier." Here are some examples of how putting a person, a facial expression, and a quote together can create a powerful message:
Before the market crash: salesman
"In this industry, we do business with a handshake. My customers are honorable people and we trust each other to honor our commitments."
After the market crash: corporate attorney:
"The customers dropped us like a rock. They cancelled all their orders and we have no contracts and no risk sharing agreements. We built product based on their forecast, and now they won't take it. We're screwed."
Another example of quotes and faces synchronized:
Before the market crash: hardware engineer:
"We take great pride in our product designs. We use the latest cutting-edge materials and components to get industry-leading performance out of our products."
After the market crash: purchasing manager:
"We let the engineers use all kinds of fancy new unique materials. Now we can't cancel orders of those materials. We are bleeding CASH for stuff we don't need."
Another example of quotes and faces synchronized:
Before the market crash: purchasing agent:
"My supplier is not a risk. Even though they're a private company, they've been around for 20 years and the owners live in my same neighborhood. Their kids play with my kids."
After the market crash: CFO:
"Purchasing never even asked about their financial situation. When they closed, we lost our only supplier. It will take us 90 days to bring on a new supplier ... if we can stay afloat that long."
The workshop
For students who have come up through the ranks of, say, industrial engineering, the idea of including pictures of people and quotes is completely foreign. All of their training has been to make your case using numbers, logic, tables, charts, and graphs. Present the evidence! We now have to teach them that this approach often fails and is sometimes counterproductive with regular people. If you only present information that looks like it came from a math book, people will tune you out entirely. And you are opening the door for an opponent who people can relate to more easily. So, we have to make our students practice multiple times using the human element in their presentations.
We use hands-on small teams to have the students practice including the human element. After an initial briefing, the students are divided into teams of four students and sent to small breakout areas. Each team is assigned one of several "causes" to promote, either for or against. Teams are given 60 minutes to create a short presentation that promotes their side of the issue using the human element in their slides. They get practice at converting their key arguments into compelling quotes. They then carefully select photos of people with facial expressions that reinforce the sentiment of the quote. Teams return to the classroom and use their presentation to sway the rest of the class to support their position. The class votes on which presentation was the most persuasive. As a teacher, it is interesting to see this technique show up later in the semester in their capstone presentations.
Supply chain graduates, engineers, and business professionals use numbers, facts, charts, and graphs to present information to each other. But to "go make change happen" in large organizations, they need to convince regular people to adopt new practices. Currently university curricula and corporate training programs fall short of teaching their rising stars to effectively lead in large mixed organizations. Including the human element in terms of people, faces, and quotes in presentations is a more effective way to connect with people and to make your arguments more powerful and memorable.
Just 29% of supply chain organizations have the competitive characteristics they’ll need for future readiness, according to a Gartner survey released Tuesday. The survey focused on how organizations are preparing for future challenges and to keep their supply chains competitive.
Gartner surveyed 579 supply chain practitioners to determine the capabilities needed to manage the “future drivers of influence” on supply chains, which include artificial intelligence (AI) achievement and the ability to navigate new trade policies. According to the survey, the five competitive characteristics are: agility, resilience, regionalization, integrated ecosystems, and integrated enterprise strategy.
The survey analysis identified “leaders” among the respondents as supply chain organizations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.
Less than a third have met that threshold.
“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” Pierfrancesco Manenti, vice president analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results.
“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti also said in the statement. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”
As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three to five years. The top five drivers are: achievement capability of AI (74%); the amount of new ESG regulations and trade policies being released (67%); geopolitical fight/transition for power (65%); control over data (62%); and talent scarcity (59%).
The analysis also identified four unique profiles of supply chain organizations, based on what their leaders deem as the most crucial capabilities for empowering their organizations over the next three to five years.
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
That clash has come as retailers have been hustling to adjust to pandemic swings like a renewed focus on e-commerce, then swiftly reimagining store experiences as foot traffic returned. But even as the dust settles from those changes, retailers are now facing renewed questions about how best to define their omnichannel strategy in a world where customers have increasing power and information.
The answer may come from a five-part strategy using integrated components to fortify omnichannel retail, EY said. The approach can unlock value and customer trust through great experiences, but only when implemented cohesively, not individually, EY warns.
The steps include:
1. Functional integration: Is your operating model and data infrastructure siloed between e-commerce and physical stores, or have you developed a cohesive unit centered around delivering seamless customer experience?
2. Customer insights: With consumer centricity at the heart of operations, are you analyzing all touch points to build a holistic view of preferences, behaviors, and buying patterns?
3. Next-generation inventory: Given the right customer insights, how are you utilizing advanced analytics to ensure inventory is optimized to meet demand precisely where and when it’s needed?
4. Distribution partnerships: Having ensured your customers find what they want where they want it, how are your distribution strategies adapting to deliver these choices to them swiftly and efficiently?
5. Real estate strategy: How is your real estate strategy interconnected with insights, inventory and distribution to enhance experience and maximize your footprint?
When approached cohesively, these efforts all build toward one overarching differentiator for retailers: a better customer experience that reaches from brand engagement and order placement through delivery and return, the EY study said. Amid continued volatility and an economy driven by complex customer demands, the retailers best set up to win are those that are striving to gain real-time visibility into stock levels, offer flexible fulfillment options and modernize merchandising through personalized and dynamic customer experiences.
Geopolitical rivalries, alliances, and aspirations are rewiring the global economy—and the imposition of new tariffs on foreign imports by the U.S. will accelerate that process, according to an analysis by Boston Consulting Group (BCG).
Without a broad increase in tariffs, world trade in goods will keep growing at an average of 2.9% annually for the next eight years, the firm forecasts in its report, “Great Powers, Geopolitics, and the Future of Trade.” But the routes goods travel will change markedly as North America reduces its dependence on China and China builds up its links with the Global South, which is cementing its power in the global trade map.
“Global trade is set to top $29 trillion by 2033, but the routes these goods will travel is changing at a remarkable pace,” Aparna Bharadwaj, managing director and partner at BCG, said in a release. “Trade lanes were already shifting from historical patterns and looming US tariffs will accelerate this. Navigating these new dynamics will be critical for any global business.”
To understand those changes, BCG modeled the direct impact of the 60/25/20 scenario (60% tariff on Chinese goods, a 25% on goods from Canada and Mexico, and a 20% on imports from all other countries). The results show that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources or suppliers are found.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU, and Japan. Consumer electronics, electrical machinery, and fashion goods would be most affected by higher tariffs on Chinese goods. Specifically, the report forecasts that a 60% tariff rate would add $61 billion to cost of importing consumer electronics products from China into the U.S.