It feels like we’ve moved out of a supply chain frying pan and into the fire recently, and with so many strong external forces at play in the supply chain world at the moment, it’s easy to feel out of control.
The truth is that no one can control everything and you can be forgiven for that feeling of powerlessness that arises as suppliers miss deadlines or raise prices. Instead, how can you turn the anxiety into building a more resilient supply chain capable of handling (almost) whatever is thrown at it?
There are many strategies you can still employ to boost effectiveness and efficiency in these complex times, here are our top five…
Having too many product lines on offer multiplies the impact of supply chain component shortages. It may not suit the sales department to reduce the diversity of products you offer, but there has to be a collaborative balance struck between promising the moon on a stick and not delivering it… or offering a more consolidated portfolio instead.
Consider a deep dive into sales trends, overlaid with supply chain requirements for these different percentiles of income and you may be shocked to find that you can streamline your suppliers and work more strategically with them for mutual success.
This may sound biased, but this analysis is made hugely easier with the use of a supply chain platform like SourceDogg, where data is all in one place. Then the ongoing relationship management process is all handled there too – ensuring clarity and alignment between you and your suppliers, which is another important factor in resilience. It also has a marked impact on the efficiency and effectiveness of your people and processes too. They can be more proactive and effective with fewer suppliers rather than being spread too thinly. But more on that later.
Identify, Analyse and Evaluate Risk
It’s impossible to identify every single risk in the supply chain and then deeply analyse and model the impact, but there’s never been a better time to start to look at risk analysis with added context and a keener eye on certain goods, and suppliers and trade routes.
An example would be the Ukraine conflict – where there are thousands of tier-one relationships with Russia, but millions of tier-two links that are expected to impact over 350,000 businesses globally.
By analysing your risk exposure in these areas across all tiers, you can look for opportunities to source from suppliers not reliant on the geopolitically impacted zones where possible.
Power-Up Your People & Processes
New operating conditions may mean new skills, changing roles or training your team is required to handle it and thrive against the challenging market backdrop. “If you do what you’ve always done, you’ll get what you’ve always got.” Goes the saying, but as the world changes around you – there’s a chance you’ll be left behind.
This is where automating any tedious admin work, streamlining processes, minimising duplication and digitising your operation will ensure you’re robust enough to ride the current waves and resilient enough for the next pandemic or invasion!
We know from our expanding client base only too well that there’s never a “perfect” time for digital transformation, and it’s a journey rather than a destination but moving to a supply chain cloud platform like SourceDogg may help save you an immense amount of time and frustration and attract, motivate and get the very best out of your talent internally too.
If you’ve already had a tricky conversation with sales about product line simplification, it’s time to walk over to the accounts department and start another one.
We joke, but in difficult times it pays to engage different departments and get their buy-in for your strategy in the supply chain team. We’ve written before about the perils of just-in-time (or just-too-late) production processes, but they’ve been revered for years and favoured by accounts departments for cash flow neutrality. However, as prices fluctuate and supply dries up, you may have to reconsider cashflow “rules” completely to drive sales continuity and competitive advantage.
It sounds obvious, but controlling costs is always a consideration, but it’s time to make it a priority. One example of this recently being brought into focus is the huge cost increase in logistics.
Many consumers have become used to “free” deliveries – but with spiralling fuel and energy costs, there may need to be a re-think in the product offering and pricing strategy if your costs are increasing exponentially. Cue another difficult sales conversation!
There has been recent news of retail giants such as Zara and Next starting to charge for returns as inflationary pressures such as increased labour costs, higher energy prices and logistics costs are all hitting the bottom line hard. These household names have recognised the pressure some consumers are placing on their systems with buy-try-return behaviour and processing these returns has been analysed and a decision made.
This may be a sales example, but one which does affect the supply chain as you’re dealing with restocking and demand forecasts!
By looking at the business holistically, analysing each element in the chain through a cost lens and its impact on the overall commercial goals of the business will inevitably reap benefits.
It’s been a challenging couple of years for the supply chain teams in many businesses as political measures have disrupted the flow of goods and services massively. Reflecting on the enormity of the situation and recognising the challenges realistically and pragmatically is a great way to ensure your business continues to succeed in tough times.
We believe that data can save the day and many of the above strategies are made much easier by the implementation of a singular supplier database, simplified purchasing process and an enhanced supplier relationship management programme. Sourcedogg will help you get the best from your people, power up your processes, control costs and look at ways to manage your risk too.
Talk to one of our experts today to see how our platform can help you…