In the wake of severe disruptions caused due to the recent pandemic and geopolitical disturbances, the global supply chain networks have been affected unprecedentedly. It has highlighted the lack of global resilience in supply chains and pushed manufacturers and suppliers to struggle with myriad problems- rising logistics costs and disruptions, increasing commodity prices, changing consumer behavior, and lack of flexibility to respond to the sudden alterations. The pandemic has thrown light on areas of insufficiencies for businesses. Readiness to disruptions, adroitness to tackle tough times, agility, and sustainability of supply chain operations are some key areas that companies need to reflect upon. The supply chain disruptions have aroused the need for future-proof supply chains to respond to disturbances, forecast changes proactively, and maintain endurability in uncertainty.
Strategic planning intends to work on areas of improvement, deploy technological solutions, eliminate irrelevant processes, and optimize working capital. Strategic supply chain planning deals with the entire journey from demand forecast to deciding what to produce, raw material procurement, inbound and outbound logistics planning, manufacturing management, to whole supply chain design. Today supply chain leaders are adopting sustainable strategies to identify potential disruptions and promptly respond to them. Data analytics, machine learning, software-based solutions, and IoT technologies are playing a pivotal role in driving the effectiveness of strategic supply chain planning. Risk management, dealing with supply shortages, analyzing consumer behavior timely, determining financial and operational challenges, enhancing visibility and transparency in supply chains, and incorporating an integrated approach towards planning can help mitigate the risks of any upheavals.
Below we have gathered some of the key areas businesses need to consider when developing a strategic supply chain planning for 20022 and beyond!
Incorporating Disruption Coping Strategy Formation
The ability to quickly respond, redefine operational models, and prepare human resources to adapt to these changes is of utmost importance when irregularities occur. The faster and more effectively a company can formulate, plan, and execute the disruption coping strategy, the more competitive advantages and stability in the market it garners. Defining business objectives into smaller chunks of goals and supporting new ways of working can help augment the effectiveness of a disruption coping strategy. Moreover, building a sales and operations SWAT team experienced in handling high risks and executing plans with proficiency can be of great help in times of turmoil.
Forecasting and Evaluating Supply Chain Events
Identifying the critical areas and their impact can help make an informed assumption about changing supply chain events whenever a strategy is planned. Moreover, running simulations and incorporating scenario planning exercises for events of excesses or shortages, geopolitical disturbances, climate changes, or changing customer demands can help in readiness of the business and creating future-proof strategies.
Flexibility in Supply Chain Budget and Resource Allocation
One of the major reasons many businesses require much time to transition from disruption to stability is due to interlinked fixed annual budgets. When unexpected disturbances occur, there is a need for changes in the pre-defined plan. But the interlinked fixed annual budget restraints from the rapid reallocation process, prohibiting faster implementation of disruption coping strategy. Therefore, capitalizing on diverse and flexible funding models that encourage sustainability and changing priorities is the need of an hour.
Including Digital Capabilities for Enhanced Data Visibility
With the integration of breakthrough technologies like – big data analytics, machine learning, artificial intelligence, automation, and smart software-based solutions for efficient supply chain management, businesses can take their strategic planning to new heights. This digital transformation empowers supply chain managers to anticipate discrepancies, analyze trends, and make informed & logical decisions based on gathered data. Such enhanced visibility opens new opportunities for supply chain optimization, combat disruptions, and improve customer services.
Incorporating an Asset-Light Model
The asset-light model works on the idea to keep the capital assets less in comparison to the value of operations. It involves outsourcing assets such as – industrial equipment, component manufacturing, or more operational functions to a network of vendors or suppliers. This allows businesses to maintain lower costs, agility, and lean operations.
Today planning, execution, and analysis functionalities in strategic supply chain planning have transformed extraordinarily with modern technologies. Businesses capitalizing on these technologies are reaping significant bene in the form of a competitive edge. Another trend gaining popularity to respond to disruptions quickly is the asset-light model that includes outsourcing supplies and services to enhance profitability and scalability. Many organizations are adopting this model to increase resiliency towards global supply chains.
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