Supply Chain leaders across enterprises were already dealing with various issues in trying to do their best to achieve their service levels such as
Depending on the organization’s digital transformation journey in the quest for building the Digital Supply Chain and the state that they have achieved some of these issues might or might not exist or exist in specific areas. Based on the discussions I have been having I had seen a flavor of these issues in various areas or regions.
The Pandemic added to these woes by adding more complexities and disrupting the Supply Chain ecosystem making all know data points, notions, and ideas irrelevant. The Supply Chain which is supposed to act as a unified ecosystem/organism and is a challenge to get it to behave that way in the best of times spun out of control creating a reactive supply chain than a responsive one.
Some of the challenges brought on by the Pandemic are:
According to a Gartner survey, 76% of supply chain executives indicated that compared to three years ago, their company today is facing more frequent disruptions in their supply chain. Meanwhile, another 72% reported that the impact of disruptive events has increased.
These will continue to stay on in the new normal which might take 12 – 18 months based on the Event 201 simulation.
Supply Chain and IT Leaders have been having various discussions to deal with such situations and the roadmap they had agreed on for digital transformation and were building has come to a grinding halt. Those who had not started it are breathing a sigh of relief because they would not know what to do with projects which were half done should they continue or stop it. Those who are in the midst of it are undecided. Those few who have completed are happy that they did it.
We have looked at these challenges and given a tactical short and medium-term approach to overcome these challenges based on where you as an organization are in your journey and a more strategic long term approach to be prepared for such a pandemic going forward. We have come up with this approach keeping two key aspects as the pillars of the strategy.
As part of the immediate steps, we need to map out which are the SKU’s we should be focusing by applying to the 80/20 rule which would give you a perspective of which SKU’s currently give you 80% of the revenue and we need to works towards ensuring the service levels of these SKU’s are maintained at the appropriate levels and reconfiguring the entire supply chain towards that.
This is already being done by companies such as Coca Cola, Mondelez and P&G. To know more click here.
Now that we have identified the SKU’s how are we going to ensure the service levels considering the demand is still erratic. Now, this would entail a series of activities that you will need to do both on the upstream as well as the downstream part of the supply chain.
Ensure these dashboards have the right information based on the role and also take care not to overload it with information.
According to a Gartner Survey More than 80% of supply chain professionals report that decisions made in response to disruptive change could be improved — either more accurate, faster, or more cost-effective.
These reports could have aspects such as
Depending on the role of the person the metric would be aggregated to their specific area of influence a territory/ region or a country as the hierarchy may be and ensuring the same view is cascaded through the entire downstream supply chain.
Look at creating the same kind of operational dashboards for the Upstream supply chain.
Read more: Creating supply chain symphony with SCOR
Hemanth comes from a strong technology and consulting background and was instrumental in establishing the Data & AI practice at Acuvate. He has proven mettle in CPG & Manufacturing domain. Currently leading the North America business for Acuvate with a primary focus on Business Development and team building – centered around a core belief on Accelerating customers Digital transformation with AI.
Hemanth Kumar