It is my position that years of cost reduction strategies have led to fragile supply chains and the COVID-19 pandemic only acted as a catalyst to the global disruptions we are currently experiencing. Various signals have been missed by organizations to make their supply chains more resilient leading to disruptions and inefficiencies.
One of the key signals that the industry has been struggling with is volatile demand signals . An improved forecast accuracy will drive better fill rates thereby improving customer service levels. Bricz’s experience has shown that using various demand planning technologies to capture early market trends, identifying the fast movers from the diverse portfolio of items and, using AI to predict seasonality trends and promotion uplifts are areas of focus that will help mitigate demand fluctuation risks. This in turn helps planners generate better forecast signals to plan their replenishment accordingly.
Secondly, a critical aspect that is often overlooked by several organizations is the importance of process automation and adoption of supply chain technologies such as inventory optimization, capacity planning and replenishment planning. Access to up-to-date and reliable information can improve supply chain visibility and accountability. Many companies still use manual processes and traditional methods such as spreadsheets for maintaining inventory data. Embracing digital transformations and investing in tools for inventory management will help organizations in many ways. These tools can efficiently calculate safety stock to avoid stockouts and accurately allocate inventory in the network to minimize touches, improve customer service levels and ultimately improve the bottom line.
Thirdly, while businesses have understood the importance of including supply chain leadership positions in the C-suite in recent years, many organizations still treat supply chains as a medium for cost savings rather than realizing the strategic importance of supply chain to provide revenue and stay ahead of the competitive curve.
Fourthly, a properly executed S&OP process is critical for the long-term success of an organization. If S&OP is well conducted, it will help an organization bring operational efficiency, provide the right input to financial planning and analysis which will, in turn, define the strategy that aligns with the business goals of an organization.
Lastly, cost reduction strategies such as Just-in-Time inventory management and contract manufacturing lead to a fragile supply chain. As businesses continue to solidify their supply chains, tapping on programs such as Vendor Managed Inventory, diversifying their suppliers and manufacturing facilities, moving fulfilment centers closer to improve customer service levels, creating real time insights focused on last mile delivery strategies, will contribute to building a strong and resilient supply chain foundation.
Bricz, a leading global supply chain solutions provider, emphasizes connectivity while providing compelling results and minimizing potential issues. We are focused on helping retailers and other consumer-centric industries optimize their supply chain as we have described above. Interested in learning more about our services and how we can help elevate your supply chain? Reach out today at email@example.com to connect with one of our subject matter experts to get started.
Contributor: Sahiti Kalapala, Senior Supply Chain Consultant at Bricz