Supply chain managers are facing an increasingly complex and challenging landscape. While the spectre of the pandemic is fading, new challenges and pain points have arisen. Geopolitical tensions, economic pressures, and the looming climate crisis all conspire to make effective supply chain management more essential to organisations than ever.
For supply chain managers, the current landscape can feel overwhelming. Increasingly, SCMs are asked to react to complex and intractable problems while also increasing efficiencies and creating strategic wins for the business.
Here are four key areas where SCMs can focus on creating efficiencies and unlocking new capabilities for their supply chains.
1. Visibility
Visibility is critical for supply chain leaders looking to improve their operations’ efficiency or productivity.
AI and machine learning can quickly and accurately ingest large amounts of data. As a result, successfully adopting these technologies can generate useful insights that can improve supply chain forecasting, inventory management, and customer service. IoT enabled real-time tracking systems can help follow the movement of goods through the supply chain, helping identify potential inefficiencies and bottlenecks. Lastly, using enterprise resource planning (ERP) software to orchestrate and oversee multiple elements of a supply chain is becoming essential as supply chains become more complex.
2. Sustainability
Decarbonising the supply chain is becoming an increasingly non-negotiable goal for SCMs. However, sustainability reform is often the first thing to take a back seat when supply chains face pressure to improve reliability or cut costs. Nevertheless, pursuing more sustainable supply chain operations is an increasingly essential way to mitigate risks, such as regulatory penalties or reputational damage.
Engaging in ethical and sustainable sourcing can not only ensure compliance and create reputational benefits. Sustainable supply chain practices can also improve supply chain continuity, create new partnerships, and attract new business.
3. Automation
From warehouse automation and robotics to RPA and back-office automation, figuring out which elements of a supply chain to automate can be a challenge. Nevertheless, identifying which pain points can be alleviated by automation is a worthwhile pursuit for SCMs.
For example, supply chain teams handle a wide variety of documents, including delivery orders, dock receipts, bills of lading, and sea waybills. Processing these manually is time-consuming and prone to errors which can delay and disrupt operations. Artificial intelligence (AI) and optical character recognition (OCR) enable document automation from one end of the supply chain to the other.
4. Demand planning
Accurate demand forecasting—using historical sales data, research, and analysis of market trends—enables supply chains to ensure they aren’t overstocking (or going to run out of) inventory. For example, a clothing retailer could use sales data from the previous ten seasons, along with current fashion trends to predict the demand for specific clothing items next season.
Big data and predictive analytics enhance forecasting accuracy, better enabling businesses to adapt to changing customer needs. Advanced software tools automate parts of the forecasting process, offering real-time updates and alerts on inventory levels to optimise stock management.
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