The supply chain is no stranger to change. In fact, we are so used to being chameleons, adapting to the latest innovation or problem, that it is very much part of what we do. Businesses, which stand the test of time, do so precisely because of their skill at adapting to face the latest challenges, and indeed thrive from them.
However, that doesn’t discount the number of dinosaurs that still do things the way they always have. They are hanging on, just, believing that don’t fix what isn’t broken is the maxim that applies to them. However, legacy supply chains need to start facing adaptability head on.
There’s a very good reason why businesses keep on, keeping on. The pressure and speed of daily tasks and demands mean that it’s very difficult to hover above and see reality. Businesses are too busy doing business to stop and think whether they could do things differently, or to consider how doing things differently could increase efficiency and profitability.
All the while a business is reasonably successful, this ethos pervades. However, this is coasting. It’s not the landscape of thriving business.
To remain competitive and thrive, we need to be in the position of ensuring change. Here we look at a selection of common factors within supply chain planning that we believe all businesses should be strategically considering at defined intervals.
(1) Sales and Operation Planning (S&OP) must be used to understand key products and customers:
Demand management is not just about forecasting. By nature, customers are fluid. The demand for products also changes considerably from launch to end-of-life.
A strong S&OP process is about understanding business goals and linking these to customer and product characteristics. The main purpose to this is being able to see and respond to changing priorities so that the response to those changes is the most advantageous to the business.
S&OP is the way of hovering above the everyday, to see the bigger picture of changes over time. It’s about matching perceived priorities with actual ones to, in turn, feed through to strategic goals.
(2) Monitoring, and preparing for, changes in the wider market:
All customers, whether loyal die-hards or newcomers, have high expectations of what can be delivered to them. This is the nature of the modern supply chain beast. We’re constantly being told to view them as the individuals they are.
However, in reality, this is simply impossible. It’s therefore more important to look at fluctuations and changes on a larger scale and plan for these.
This is about getting insight into being ahead of the game in terms of what the customer is likely to demand. This is only possible if you’re actively reviewing the market and keeping track of wide-scale changes, particularly in terms of what others are doing, and what customers expect.
(3) Develop a culture of knowledge and skill acquisition across the business
Part of step two inevitably requires the acquisition and development of skills that are fundamentally new or changing. This is particularly relevant when you have a large number of old-timers without much new blood coming in.
Longer-term committed staff bring exceptional knowledge of the organisation, and how the business works. However, they can easily become introspective and not see the wider market changes.
Therefore, it’s paramount to adopt an outward-looking culture whereby knowledge development is rewarded and recognised. Together with new influences from newcomers, this is a powerful combination, which positions you to better weather change.
On the ground, this should be reflected through appropriate training opportunities and conferences as well as the ability to network within the wider industry. In this way, the whole business expands its horizons and is able to drive change rather than be at the mercy of it.
(4) Be on point with technology but give pride of place to S&OP
Technology is undoubtedly marketed well. You can quickly believe that it is the answer to all problems and that you must have the latest tech, no questions asked.
However, whilst technology shouldn’t be ignored, it should be viewed as an enabler and a tool to achieve your desired outcome, not a leader of the process itself. Technology is only as good as the decision-makers behind its implementation and use. Therefore, those decisions must emanate from a position of knowledge and insight, not simply from the point of view that ‘any technology is good’.
This also helps supply chains deal with the fact that, with the rate of technological development, it is impossible to keep pace with every release and would make very poor financial judgement. Instead, keep one eye on technological developments, but only from a solution-focused angle.
(5) Utilise experts to plug the gaps
Businesses can easily become very introspective. Processes become staid and efficiencies are lost. The people within are rarely the ones who can truly gain the perspective needed in full knowledge of what others within the industry are doing.
This is where outside experts, such as supply chain consultants like the team at Paul Trudgian, really represent immense return on investment. They have the view and knowledge of what is going on in the wider supply chain landscape, and within your industry, to ensure your own adaptability.
Engaging with outside experts should always represent excellent ROI as you can benefit from their knowledge and skill to excel. They can assist in the development of better practice and improved efficiencies. Using such experts should simply be part of your commitment to understand, utilise and adapt to change so that you grow and thrive in the future.
These are the businesses that aren’t coasting but are thriving in the environment they operate in, whatever that environment looks like today. Give us a call on +44 (0) 121 517 0008.