Rising energy prices, reliance on suppliers in low-wage countries and fuel and skills shortages are suddenly major water cooler topics. Increased shipping costs, unpredictable acts of nature like the pandemic or volcanoes erupting, and demand surges for off the cuff items are now breakfast table conversations- even your kids are asking what supply chain issues are preventing their upgraded iPads, smartphones and Kindles from getting to them quickly!
Overnight, supply chain has gone from being relatively issue free and under the radar, to an endless stream of disruptions, a myriad of demands and constraints, that was impossible to see coming. The list of issues seems to be growing by the day and there’s no going back. Supply chain planning needs to switch gears… and accept its new profile in the spotlight.
Its bad news for those in supply chain hoping for some respite, especially having navigated the challenges of the pandemic, when they scaled back their range of offerings and services because they weren’t able to meet demand. They tried to remain nimble whilst adapting to changing market demands – but were also juggling aggressive cost savings and slashing of inventories. Did all the shape-shifting leave us exposed for the new troubles that have hit? With the benefit of hindsight, yes, but that’s doesn’t help much, does it? What can we do to make sure we’re in better shape for the next set of challenges?
Resilience is required, and it’s the new buzzword in the supply chain. So how do you build in that ability to spring back into good shape when your foundations are reeling? First, you have to start somewhere. And it might be tempting to dust off the old fall-back solutions – like having more inventory, longer supplier lists, cost-cutting – to solve new problems. But they won’t succeed. So no, the answer lies in something more seemingly futuristic.
Remember the much sought after super-charged supply chain processes of the future – a genuinely cross-functional set of processes that flex with the constant uncertainties and challenges? Now is the time to implement this. With business divisions united behind a decision to take the best supply decisions that maximise opportunities and mitigate risks, whilst balancing revenue, costs, service, constraints and working capital objectives – that’s what the new normal demands.
So where do you start? You begin with a mature S&OP process, the foundations of which are probably there in your business. You might not have been bold enough to build on them before now. But its time. Our supply chain issues remain under the spotlight- and it’s not switching off anytime soon. Make sure next time it swings your way, your processes are modern, flexible, and fit for the new ways of doing business.