Agile Supply Chain Will Drive The New Normal
Supply chain has felt most of the brunt of the global pandemic's disruptive power. Supply chains for products as diverse as food, building supplies, and electronics have been stretched to their limits by unpredictable swings in both supply and demand. Manufacturers have struggled to maintain production, and both B2B and B2C end customers have managed through shortages and out-of-stock situations.
However, the good news is that innovation is thriving amid the adversity. Opportunities are abounded for the SCM players to hone their competitive edge and create new ways of doing business. To help weather the turbulence and harness the upside potential of the new normal Leading organizations are utilizing new technologies and reshaping their work to continue fuelling the supply chain. We are seeing tech-driven innovation spreading rapidly across key areas of the $7 trillion wholesale distribution industry, from digital commerce, to planning and forecasting, to ware-housing and logistics. Distributors are also using new technology solutions to reimagine how they manage rebates to optimize revenue.
Although the current crisis has sent shock waves through global supply chains, it did not, by itself, because the breakdown of existing supply chain paradigms. In fact, it surfaced fault lines that were already in place for some time, accelerating the unraveling of a longstanding trade structure. For some supply chain leadership teams, the path of least resistance will be to react and improvise as best they can, on a situation-by-situation basis. In our experience, such piecemeal contingency plans and relatively superficial management tactics will yield piece-meal results and a skin-deep business resilience. Our experience suggests the supply chain organizations that will emerge strongest are those willing, by contrast, to see current emergency conditions as their opportunity to systemically overhaul their entire operating model. The most successful leaders will be those who can distil insight from a sea of data points, distinguish between leading indicators of significant long-term secular trends and high-profile outliers, and turn insight into action. And do this entire thing with minimum latency / reaction time.
Cloud solutions are also inherently architected to make better use of the technologies that are becoming pervasive in the new normal
The new normal will call for more agile manufacturing operations as well, as businesses rapidly shift production plans and retool factory floors to build products now deemed essential. And with worker health and safety a top priority, manufacturers will need to be able to quickly implement a range of safety measures, such as distancing practices on assembly lines. Workforce safety modules that can be turned on at a moment's notice can help manufacturers swiftly pivot to address a sudden health emergency.
Today's supply chain is broad, deep, and continually evolving, which means that it must be agile to be effective. In the past, supply chains met enterprise and customer needs through a beginning-to-end model that was largely unaffected by change. Consumers now have multiple choices in how they purchase products-in stores, online, and more. They have also come to expect increasing levels of customization. An agile and zero latency supply chain can deliver on those expectations.
With today's SCM parameters, the cloud is a natural ally, in part because cloud-based applications are inherently more flexible and adapt-able to change. Cloud solutions are also inherently architected to make better use of the technologies that are becoming pervasive in the new normal. Retrofitting your environment so these technologies can function on legacy applications is both complicated and expensive.
Another significant benefit of integrating the cloud into your SCM system is that you can adopt elements of cloud based SCM depending on your specific business needs, without undertaking a full-scale migration. Many companies find themselves with a short-term need to rationalize their move to the cloud. The best SCM systems help you extract more value from your current assets and customize your cloud integration to suit your SCM needs, both now and into the future.
The new normal will call for a zero latency supply chain operation, where the entire sourcing to receive, product lifecycle management, order to cash, plan to manufacture and maintain and logistics are near real time sensitive to any changes, fluctuation or abnormalities and able to execute rule based decision system across the SCM and Back office execution system. Remote working is going to be neo normal and that requires complete support from your supply chain management system which legacy technology platform will struggle to address. Going for-ward we will also see an added emphasis on worker health and safety and without modern emerging technology support it will be quite a difficult task to achieve.