There is no better way to coin the sentence other than to face the reality of it and get to work on ensuring one can sustain and navigate successfully at a time where forecasting tools are inconsistent and efficiency is non-existent.
Supply Chains have been strained and stretched from the onset of COVID19 and now, businesses must look to find solutions in order to remain resilient, be seen in shelves and also stay top of mind especially with a boom in consumer spending habit that has accelerated rapidly with no sign of slowing down.
Managing supply networks in today’s world necessitates the need for constant design and redesign, risk assessment and coordination far beyond the linear patterns of purchasing > Supply > Production > and Consumption. With the complexities that have arisen due to an ever advancing appetite for new consumer product, process and timelines within the technological landscape and beyond, supply chains globally now face much more market uncertainty and sophistication hence this calls for supply chain managers to constantly adapt to new methods in order to build a resilient supply chain for their firms.
In the past, C-Suite executives often paid little attention to the value inherent in their supply chain because it was seamless, regardless of category, and seen as complimentary to the core activity driven by the firm. It is a different terrain today, as supply chains and its effective management play an integral role and to a greater extent, determine a firm’s competitiveness and success in markets they operate. A supply chain manager’s role and reach cuts across from strategy, production, sales, marketing and distribution (inbound and outbound) due to the functional responsibilities of being able to deliver on time in full, control inventory, plan, schedule and mitigate product risk as it is transformed into the value intended for the final consumer. As delays in ports, flight schedule uncertainty, and capacity shortages continue to deepen without respite globally, here’s a few strategies managers can apply to tackle the situation as they avoid interruption, plan around disruptive impact and continue in the delivery of an effective and efficient supply and demand flow:
- Prioritize Visibility — Firm level supply chain managers today have a responsibility to ensure that they monitor end to end what occurs in the movement of goods intended for their consumers from origin to destination. Through the use of ERP and digital management platforms to track, trace, retrieve data and coordinate operations, managers can thus be able to determine when and in what quantity to keep contingency stocks and ascertain buffer periods that occur and prepare accordingly from insights gleaned through available data on these platforms. In addition, being abreast of raw materials and service routes assist to effectively organize, cross dock and develop crisis mitigation methods should they arise from freight partners and suppliers while also sharing these information to assist in continuous improvement of the general network. Visibility today for SC managers lie beyond the window of origin to destination as without adequate collaboration from other functional departments, insight gained is rather skewed. Every component of production (RM/WIP/FG), Sales and Marketing, and Customer Experience report play a role to enable a real time comprehensive overview that serves to deliver a competent and reliable supply chain for the consumer.
- Build Long Term Supplier Relations — Behind every supply chain network exist people and entities. While they consist of various sub levels and in tiers, we can generally call them either of producers or manufacturers. These entities in collaboration with procurement executives ensure firms receive supplies or service needed at the right time, quantity, quality, cost and factory or place agreed upon. Taking into cognizance a firm’s revenue portfolio and product analysis, managers must develop relations and leverage on connections with suppliers to secure sufficient supply that ultimately leads to less risk, prompt deliveries and impacts the bottom line positively. Common steps to take in supplier development that lead to innovation and a win-win outcome involve sharing the mission, vision and values a firm holds true with suppliers as well as performance expectations to allow both parties clearly understand the task at hand and the roadmap towards achieving it. With a proper service level agreement to legally bind parties that includes penalties for defaults, a worthwhile situation can be continuously attained in harmony and growth. It is pertinent to note that without intentionally building strategic relationship capital with suppliers, firms risk losing out on establishing a long term efficient network devoid of lapses and achieving competitive advantage in markets they operate if uncertainties arise. Supplier relationships matter to a great deal.
- Near Shoring and Local Ecosystem Development — The call by C-Level executives to de-risk firm supply chains to its lowest level have never been more harmonized since the wake of the disruptions occasioned by COVID19. Be it from a strategic perspective for the long term or the need to have a supply vendor base that is within reach, supply chain managers have a critical duty to shop for more sustainable sourcing partners, while developing mechanisms to improve their local systems and encourage near shoring. The benefits of having a pool of available and verified sourcing partners far outweigh the loss to be incurred should risk and bottlenecks occur leading to inability to supply products. Talk about port congestion, container shortages, rising cost, non commitment to hitherto pricing agreements and the increasing difficulty with getting goods to shelf, firms are grappling with so much and must look to contiguous means for reprieve. Near shoring, which involves the movement of a firm’s production operations to a proximate location is becoming an attractive choice irrespective of possible high operational cost, as it allows firm some level of control to manage external risk such as geopolitical instability (US-China trade war) and enable products arrive with consumers at a faster timeline.
As the global economy continues to battle these challenges, one thing we all know for certain is that change is here and firms must adapt through the tide of its consistently rude shock waves. From China’s zero tolerance pandemic control measures having a ripple effect across the world, to America’s port problems and Britain/Europe’s bottlenecks, a large swathe of uncertainty still lies ahead for SC Managers to tackle. Nonetheless, with rising consumer demand that aren’t looking to ease anytime soon, these difficulties thus provide an opportunity for firms to optimize better through adaptability and build goodwill, trust and competence within their market of influence and beyond.
At SARA, we have got you covered every step of the way!