A combination of intensely competitive global markets, constantly evolving consumer demands and unsettling international geopolitical events means that manufacturers can no longer rely on conventional models to optimize supply chains. Instead, they need to redesign their networks and planning processes to be more responsive to modern customer requirements.
Investments in supply chain responsiveness protect a business from demand fluctuations and can deliver huge value in terms of efficiency and cost reductions. Increased responsiveness also can enable manufacturers to deliver more personalized and streamlined services, rather than just mass-produced products and potentially inconsistent delivery methods. Here are five steps manufacturers can take to boost their supply chain responsiveness.
1. Assess your company culture. If you are starting from a level of maturity based on manual processes and spreadsheet-based planning, the transformation will take some effort. Therefore, one of the first steps is to get executive buy-in into the transformation initiative. Next, consider company culture for data-sharing and collaboration. Research shows that manufacturers with multiple reporting channels and decision-makers battle to share information effectively. Leaders need the most accurate, up-to-date information to make timely decisions. And requirements for lengthy discussions and prolonged decision-making processes make it impossible to be agile and responsive. Company culture and executive processes must be aligned to the goal of supply chain responsiveness.
2. Define a goal. It’s hard to work toward a goal if you haven’t defined it. Determine what supply chain responsiveness will look like for your organization and what steps need to be taken to reach that status. Having a solid plan also makes it easier to involve other departments to support the goal of responsiveness for the whole organization.
3. Opt for efficient technology. Next you need to incorporate the technology and applications that will help you reach your goal. Technology vendors have developed tailored and niche supply chain solutions that support transparency and real-time visibility through the internet of things, artificial intelligence, blockchain and advanced analytics. You might be tempted to opt for different solutions for different parts of the process — such as forecasting, master production scheduling or collaboration — but that is not always the best strategy. Because of the collaborative nature and breadth of the transformation process, companies should look at applications that are part of a platform. A platform allows different groups within an organization to work together more cohesively and share data seamlessly.
4. Add more suppliers. Supply chain diversification or multi-sourcing involves sourcing a product, part or material from different suppliers. This means the demand can be split across multiple vendors to reduce risk and relieve pressure. Supply chain technology can help support strategic supply chain network design by determining optimal ways to add diversification without adding too much cost. In situations where it is difficult to work with more suppliers or expand supply capacity in other ways — and even in situations with a healthy amount of suppliers — it is important to cultivate supplier relationships with strong communication and real-time, accurate updates of supply problems to flag risk events and allow you time to develop and enact contingency plans.
5. Keep expanding the end goal. As you work toward supply chain responsiveness, monitor your progress and the incremental value delivered. Are you getting the expected value at each step of the process? Is your progress healthy or shortsighted? Are you ready for next steps? Make sure the goal engages all critical stakeholders and leverages an integrated and collaborative process supported by platform-based technology. Together, you can grow and be more responsive to supply and demand changes up and down the supply chain.
Take a moment to explore ASCM's CPIM certification. The program gives you the skills and competencies to develop an agile supply chain.
