The Traditional Supply Chain
Conventional supply chain thinking was centered around low cost while also building internal business units to work within the constraints of structures and systems. This created silos within the organization where information flowed linearly through spreadsheets, creating an even wider disconnect amongst the various teams. Demand, supply, inventory management, production, and capacity were all impacted as handoffs between these silos slowed down the entire process, taking days to put plans in place. Another trend of the traditional supply chain was offshore manufacturing as a tool to keep down the cost. Offshoring led to longer delivery times, higher shipping costs, and excess inventory.
Modern Supply Chain Centered Around Agility
Today, it has become evident that the traditional practices of supply chain leaders are antiquated. Consumer trends have made it more important to manufacture and deliver high-quality products with shorter leads times and varying volumes while providing transparency of the production and sourcing process. Nearshoring has also become more popular for most industries, as speed to market increases, and companies can meet the consumer’s changing demand. Being agile within your supply chain means that businesses can rapidly adjust to industry disruptions. There are three essential characteristics to ensure supply chains are flexible enough to adapt appropriately to the changing world around us.
Real visibility is achievable when you can view your end-to-end supply chain. This transparency allows for planning across the entire process versus individual business units or silos. Companies can also catch potential issues or delays early on when there is improved visibility across every product lifecycle process. In addition to the benefits of transparency into the product lifecycle, having visibility into your vendor network is highly beneficial. When companies can rate and compare, they can quickly move from one partner to another if changes arise.
Not every member of the supply chain is often privy to updates in business processes, schedules, and organization changes. When all of your supply chain participants all collaborate on one platform, it allows for updates to be shared in real-time with the right members of your supply chain. Therefore, there are no surprises with supply when there are changes to demand as it is immediately apparent across the connected network.
Collaboration is about bringing all stakeholders together in real-time to meet corporate metrics and reach goals as one cohesive business unit. Working together in a unified environment or platform allows for multiple scenarios to be evaluated without long email chains or texts that can be difficult to sort through and archive.
Disruptions help us make changes where needed to optimize for the future continuously. Supply chain management just went through a tremendous crisis, and now we can identify ways to improve. Low-cost supply chains with very little visibility across their network may no longer work, and companies need to review and prioritize how they will work in the future.