Looking back, planning forward

From extra capacity and inventory to alternative suppliers and different routes to market, most supply chains now have an element of flexibility built in to combat potential disruption. The current challenge, from source to consumption point, is that the various disruptions are hitting multiple routes of the supply chain in multiple locations. The protection built in just isn’t enough.

Combine the ongoing disruptions with calls for increased sustainability, and businesses face a complete overhaul of operations to stabilize operational flow and meet customer demands. So, what can businesses do? Leverage technology.

Technology, such as intelligent planning, leveraged alongside scenario planning can build additional resilience into the chain before a disruption occurs. In our ever-evolving economy, the adoption of technology is vital to surviving economic turbulence.

There are three factors to adopt when overhauling supply chain management processes:

1. Data for decisions
Despite evolving technology, many businesses are still siloed in their approach to data management, with key insights stored in multiple Excel sheets amongst various teams. For decision-makers, this prevents the ability to have a holistic understanding of the organization and its performance.

The opportunities for businesses that bring their data together are huge, and not by creating an enourmous spreadsheet! Businesses, large and small, should be using data – one of their biggest, lowest cost assets – to gain a comprehensive picture of the organization, thereby leveraging insights for informed decision-making. The days of trusting your gut have passed, making way for the decade of data.

2. Predicting the future
Decisions can only be made based on what we know. For example, travelers knew about the disruptions, as a result of rail strikes, weeks in advance. In this scenario, businesses could have adapted operations to take into account staff working from home as a result. Calendars could be rearranged and necessary steps taken for employees to work from home, saving countless business hours and employee stress. When business leaders know what’s coming, decisions can be made to ensure smooth operations. The same is true for intelligent supply chain planning.

To predict the future, businesses need to generate maximum visibility, not just from their own supply chain, but from the industry and key customers too. By enlarging the company’s peripheral vision, businesses can leverage more informed data to make decisions which could save tens of thousands of pounds. Apply this process to hundreds of decisions being made across the company every day and profit margins have suddenly increased.

In retail, for example, a retailer might have a best-selling product and considers increasing stock shipments to brick-and-mortar stores. However, the intelligent planning insights show that 90 percent of those product purchases are made online. This insight enables the retailer to make the decision instead to send the shipment to a suitable location for online sales. Money and time are saved, and ultimately the business feels the benefits of understanding its target customers’ shopping trends.

To access this vital insight, businesses need to invest in predictive planning. Turning historical data into predictions without investing significant time and resources into traditional analytics solutions.

3. Embrace the inevitable: Change
Sustainability also needs to be embedded into the supply chain. Businesses are preparing for it, consumers are lobbying for it and most importantly, our planet needs it.

With 34 percent of shoppers already choosing to shop from brands that have environmentally sustainable practices and values, the measurement and evaluation criteria around ESG will become more tangible and aligned internationally. With change on the way, businesses need to simulate different decisions to understand the best course of action to have a positive impact on the planet without negatively impacting the business. Intelligent planning shows the route for business leaders to take, demonstrating results, while avoiding greenwashing.

Dramatic change is required for supply chains to become more sustainable and impact overall business operations. To enable business leaders to make these changes, they first must understand the existing supply chain model. Through in-depth insights, businesses can clearly see how the supply chain works and identify areas for improvement. Leveraging this understanding means more informed decisions can be made and sustainable practices adopted.

Businesses need to act now to plan and prepare for disruption. Even if every business took intelligent planning and collaboration seriously, the supply chain would still take an estimated five years to rebalance and return to a stable condition. In the years leading up to this point, disruptions will continue and flexibility will remain vital. Leveraging historic data to intelligently plan for the future is the future.

For a list of the sources used in this article, please contact the editor.


Dave Food is Head of Supply Chain at Board International and Postgraduate Supply Chain Lecturer at the University of Warwick. Board is the number one decision-making platform, empowering people to have a transformative impact on their business by helping them to leverage their data in a flexible, all-in-one environment. H&M, BASF, Burberry, Toyota, Coca-Cola, KPMG, and HSBC have digitally transformed their decision-making processes using Board.