Do You Have an Agile Supply Chain? Here’s How to Know
The rise of tech has made consumers demand fast, stress-free access to the products and services they purchase. Consumers, as well as manufacturers, distributors, services organizations, and other companies upon which consumers rely, are expecting timely and accurate tracking and communication. Understanding your supply chain’s role and flexibility is crucial in meeting these demands and remaining relevant in a highly competitive market.
A flexible supply chain can adapt to changes in consumer demand and resource constraints brought on by war, global pandemics, or whatever else comes next. Ultimately it can position your business to become and remain adaptable to unforeseen changes and add significant resilience and value. Strategies like a deep supplier pool, for example, will help you adapt to changes like demand increases that come without notice.
Flexibility in your supply chain is adapting without breaking. Agility is the power to do so quickly and easily. There are a few steps that you can take now to put your supply chain in a position to adapt with flexibility.
How long does it take to accelerate your supply chain throughput and meet customer demand? How is the reliability and quality of your products and service? Answers to these questions are tell-tale signs of your supply chain’s agility and are a test that many companies were forced to take during the recent pandemic. A business may decide to wait on changing customer demand or pandemic situations to test its throughput, but doing so may result in supply chain failures, causing businesses to lose money and customers.
Preparing for what could happen next is important so you are ready to tackle what does happen.
Anticipating the future – forecasting for a more resilient supply chain
Forecasting for the future, with data and insights–instead of gut-based predictions, can help you prepare and gain a clearer picture of what might be on the horizon. Initial steps to supply chain forecasting include:
1. Talk to your customers
- Get to know them and their production plans.
- Find out if they are introducing new or improved products, expanding facilities, or widening geographic or demographic reach.
- Ask about the anticipated demand for your product.
2. Anticipate and forecast demand
- What is the plan if demand is exceeded?
- What variables might affect demand? What has historically happened?
- Consider what the competition is doing and how their market positioning could support or hinder your own.
- Look at market trends as they relate to your industry and similar industries.
3. Utilize technology
- Trying to navigate all the above data and create accurate forecasting and associated strategies using Excel spreadsheets or tribal knowledge can be both tedious and risky. Your competitors are more than likely using current technology to forecast and amplify their supply chains, and so should you. Implementing the right ERP for your needs is critical.
- Begin with an overall process and technology assessment to see where you may be able to add improvements or automation.
- Bring in the necessary assistance to navigate the selection, integration, and utilization of supply chain technology. An excellent independent ERP consultant will give you the unbiased, transparent information you need.
4. Prepare for the unexpectedThe pandemic taught us that anything can happen and immediately impact demand and disrupt supply chains. Prepare for a crisis ahead of time and what to do if it happens.
Armed with the answers, you can turn your attention upstream to your suppliers. Even if you have confidence in your team’s internal ability to meet any challenge, you have to be sure your suppliers are up to the task:
- As you are the customer, vendors may initially be hesitant to disclose negative information. Remind your vendors that the accuracy of the information, good or bad, will ultimately determine your continued business relationship.
- Suppliers can also be great resources in finding alternative solutions to current supply chain issues and introducing trending ideas (at least those that they support).
- Don’t hesitate to negotiate. When times are tough, everyone is asking for a break, and you are unlikely to receive one if you don’t ask.
Remember, your ability to meet customer expectations is directly related to your suppliers’ ability to meet yours. Make sure they are part of your supply chain equation and mitigation practice.
The best practice is to conduct a quarterly review of your customer’s needs, your supplier channels, and supply chain logistics. This will provide you with ongoing, up-to-date, and relevant visibility of potential change. These quarterly reviews will equip you with the information needed to test your suppliers’ ability in meeting your needs.
In a market that seems to change constantly, your supply chain is always at risk of suffering from a weak or missing link. Constant vigilance and keeping flexibility and agility top-of-mind in your supply chain management strategy will help you see changes before they become a problem, giving you time to adjust course and protect your competitive advantage.
At KnowledgePath, we have helped thousands of companies navigate the complexities of their supply chain, from assessment, to repair, to automation, we LOVE talking supply chain. Please reach out if you would like to discuss your own situation.