Take Charge of Your Supply Chain – Part 3 of 5
There was a time, not long ago, when managing the supply chain could be summarized as a process of anticipating demand, identifying suppliers, confirming the timetable for receiving product, negotiating pricing, and getting the product to the distribution source so that retailers did not experience stock-outs. By no means a simple process, supply chain management has always been challenging, especially when one considers the multitude of products to be sourced, the number of manufacturers creating the products, seasonality, competition, and other factors. For the past 24 months, this process has been challenging on a whole different level.
We all know what changed: A global pandemic that, while abating, dramatically impacted the availability of raw materials, created significant issues in the availability and price of labor, and wreaked havoc on ships that were lined up outside congested ports. A global economy that has seen prices rise precipitously, impacting both consumer demand and their ability to buy. A geopolitical climate that has, in some cases, turned sourcing and availability into a wartime experience while the world is attempting to return to normalcy. And that’s just the tip of the challenge iceberg.
While circumstances creating the challenges vary, we’ve all been through ups and downs before, and we learn from them and evolve. So, what have we learned over time? Very simply, in challenging times, we’ve learned that businesses must do two things well.
- First, they must focus on the basics. In supply chain management, that means managing the five most important variables: forecasting, sourcing, pricing, volume, and shipping/delivery.
- Second, they must have visibility into the entire chain in the process of delivering on time.
- Third, they must become outstanding communicators with and at every step in the chain to set expectations; to open doors to communication within the chain and with retailers/customers.
Focus on the basics
The basics, quite simply, rely on data and trends. This brings us back to understanding and analyzing the variables of product, place, price and promotion…inextricably linked to each other and critically important to understand in order to do proper forecasting, inventory planning, pricing and quantities. If you don’t already have a sound technology platform to aid in this challenge, you need one.
Visibility of every link
Visibility into what’s happening in every link, with every partner and relationship, helps planners prepare for or react to changing situations and business constraints. With insights from a vast breadth of supply chain relationships and risk data, planners can make better decisions and mitigate risks as issues and interruptions occur.
Communicate, communicate, communicate
As for communication, smart businesses will recognize the value of open lines of conversation, and in keeping retailers and customers apprised of the process. Now is the time to build a supply chain delivery team that includes connects planners with the suppliers. Communication across every link and all the way to the end customer is critical to managing expectations and customer satisfaction with the brand.
It is time to use the online contacts you have with customers, to include messages in online billing statements, to set up portals where your best customers can go for information, and to establish a hotline that gives real information; not watered-down company-speak. It has been proven time and again that consumer sentiment grows when they are kept informed and goes in the opposite direction when they are at a loss for information.
Managing the supply chain effectively at times like these really does mean focusing on all the links in the chain. Use the information you’ve got and make sure you’re making decisions based on data, not history. Engage your providers and your customers. When all is said and done, we’ll all come out better and smarter on the other end.
The fourth part of the series: Insights and Analytics: The Key to Avoiding Stockouts and Confusion.
Back to Part 1: The Days of Predicting Tomorrow Based on Yesterday are Gone
Back to Part 2: Applying the 4P’s to Supply Chain Management