Supply chain must now consider resilience, agility, and sustainability

Supply chain planning is not just about supply and demand (anymore)

Businesses now operate in an era where e-commerce and omnichannel fulfillment are being pushed to develop logistics and supply chain management processes that move at “digital speeds”.

Organisations need to not only complete orders on time but also meet ambitious financial goals, optimise productivity levels, and do it all in an environment-friendly and sustainable way. And that’s before we mention congested ports, parts and supply shortages, rampant inflation, or natural disasters.

Historically, supply chain planning has been defined as the process of anticipating demand for products and then planning their materials and components, production, marketing, distribution, and sale. Its overall goal is to balance both supply and demand, so sales revenue opportunities are maximised at the lowest possible cost.

McKinsey believes that forward-thinking supply chain leaders have now recognised three additional priorities, that sit alongside the traditional objectives:

1. Resilience – address challenges and business disruptions.
2. Agility – meet the rapidly evolving, volatile consumer needs.
3. Sustainability – the key role that supply chain plays in supporting organisational ESG goals.

In the next decade, organisations that rely on traditional planning methods will struggle to keep pace. In the current market, supply chains will be called to deliver even more performance and agility, requiring an end-to-end transformation in planning.

According to Gartner, seventy-five percent of supply chain leaders expect an increase in high-impact disruptions compared to the rate of disruption over the past five years, specifically around three issues: risk management, future of work, and digital transformation.

Supply chain leaders will need to be at the forefront of working on these priorities and will be required to reinvent supply chain planning processes to be more agile, and sustainable and accommodate shifts in market needs.

Modernise supply chain planning tools to support evolving business needs

Supply chain leaders who cling to manual systems and antiquated software, are not doing themselves any favours. According to McKinsey, spreadsheets remain the top method for supply-chain planning, at 73%.

The temptation is high to ‘throw together’ a quick spreadsheet to solve an immediate problem. There comes a point when spreadsheets can no longer support business requirements.

Supply chain leaders should consider investing in or upgrading existing tools and connecting platforms to ensure accuracy of forecasts and projections without compromising efficiency.

• Top performing, innovative organisations are adopting next-generation software with machine learning and AI and supported by automated processes that enable faster innovation and execution.
• Being able to crunch large volumes of external and internal data in a modelling environment, eliminates manual spreadsheet links and errors, resulting in improved supply and demand forecasting accuracy.
• To be most effective, it should be performed in real-time, collaboratively, and in an integrated manner across different levels of the organisation.

But upgrading systems and reinvesting process is a major investment and no small task. But the benefits of upgrading supply-chain planning system are undeniable, with better planning processes and ultimately a more efficient and resilient supply chain.

For further information, download our 5 best practices to improve supply chain planning. Future-proofing for resilience, agility, and sustainability here

or our supply chain resilience whitepaper here