Understanding Current Supply Chain Trends
- October 12th, 2012
- By: Sean Riley
There are several consistent supply chain trends that are easily noticed when interacting with Manufacturers, Retailers and Logistics Providers.
The trends share a common objective: creating a collaborative, agile supply chain that does not trade off execution for decreased costs. Additionally, the trends share a common underlying factor: sharing end-to-end supply chain visibility shared by all trading partners used to identify supply chain events and then collaboratively executing against those events with a unified response.
- Improve Customer Service Levels over Cost Cutting
Supply Chain costs have been continuously cut since the recession began in 2008 and customers are pushing back on the cost cutting measures as they are affecting service levels. Companies are now focusing on how to improve service levels while simultaneously decreasing costs. This is the primary focus for all other supply chain activities.
- Execution Moves Ahead of Demand & Supply Planning
Demand and Supply planning has been and will be focused on continuously as this is the starting point for supply chain success. However, the ability to execute on the plan and execute when forecast errors occur, which is a constant occurrence, results in the need for companies to focus on execution. Forecast errors, or the difference between what is planned and what occurs, are driven by every day issues of “abnormal” supply chain events that can cause major disruptions. The ability to react efficiently and effectively is critical to every supply chain and primarily relies upon end to end supply chain process visibility at the transaction level.
- Resurgence of Contingency Planning
As supply chains have gotten leaner the reduced inventory levels require the ability to react quickly when “abnormal” events occur. Because these “abnormal” events are occurring more and more frequently or are becoming normal occurrences, responding to them in an effective manner is a must or companies will face severe revenue losses. The result is a resurgence in contingency planning, the ability to
recognize an “abnormal” event and immediately execute the contingency plan to avoid severe revenue and profit penalties.
- End-To-End Partner Communication & Collaborative Execution
All partners in the supply chain from retailers through raw material providers must constantly collaborate on what event are occurring, the data behind those events and how they can execute as a unified group to respond to the challenges as they unfold. By acting separately, problems are pushed from one point in the supply chain to the next and that inevitably increases costs. Trading partners must act in a concerted
manner based on transparent information to resolve issues as they occur.
- Big Data Is Becoming Mandatory
Combining the data of multiple supply chain partners, turning that data into information and being able to react and execute accordingly requires the ability to manage, process and make use of a lot of data. Big Data solutions combined with Complex Event Processing solutions will be needed more than ever to digest the enormous magnitude of available data and turn that data into executable actions. Leverage these tools with supply chain visibility solutions will quickly become a must have rather than a nice to have as companies that are utilizing these tools set the bar for the new ormal in supply chain performance.