Collaboration, agility and visibility: the supply chain trifecta?

Supply chain disruptions ramping up

Seers blessed with exceptional insights and intuition are thin on the ground, at least in the supply chain sector. Marco Turk, Manager of Demand & Inventory for the aftermarket at Denso Eurpoe, admitted that maintaining the right inventory of spare parts is becoming an increasingly complex task. He has faced one supply chain disruption after another. Delivery times from Japan increased sharply during coronavirus-related lockdowns, and the war in Ukraine forced Denso to hurriedly shut down its operation in Russia.

A recent Reuters Events whitepaper also provided some figures, proving that the supply chain disruptions are fuelling nearshoring and reshoring manufacturing and sourcing:

  • 67% of global retailers and manufacturers say that global supply chain disruptions have changed where they source materials and components from.
  • 58% of those who have shifted sourcing say that further relocation remains a high priority, or the top priority, for their business.
  • 76% do not expect supply chains to normalize in the next 12 months, following Q3 2022.

It is not only the political instability and public health crisis that are adding hail to snow . Since a long time ago, market volatility such as natural disasters and economic downturns has been constantly increasing the difficulty in supply chain management. Facing such turbulent market conditions, collaboration, agility, and visibility are definitely the magical trifecta for a successful and efficient supply chain.

Yet knowing what is needed and achieving it are two very different things. Greater collaboration, agility and visibility cannot be easily obtained unless the right steps are taken.

Collaborate internally and externally

External includes collaboration between suppliers, manufacturers, logistics providers, and customers. Internal includes collaboration between purchasing, manufacturing, logistics, sales, and customer service departments. External collaboration is essential for ensuring that the supply chain operates efficiently, effectively, and with maximum transparency while internal collaboration is essential for ensuring that all teams are aligned and working towards common goals.

Start with data and share them

Encourage the sharing of data and information between departments and with suppliers and partners. This can help organizations to make better-informed decisions, identify potential risks, and improve the overall efficiency and effectiveness of the supply chain.

Have clear benchmarks

In practice, supplier participation is the key to meaningful benchmarks. By establishing a strong two-way data-sharing relationship where everyone is aware of how and why the data is being captured, you can safeguard against any potential lack of engagement.

Use technology to facilitate collaboration

Utilize technology such as cloud computing, artificial intelligence, and the Internet of Things (IoT) to facilitate collaboration and to provide real-time data and insights. This can help organizations to respond more quickly and effectively to changes in demand, market conditions, and other external factors.

Promote agility

Agility in supply chain management refers to the ability of a supply chain to quickly respond to changes in demand, market conditions, and other external factors. An agile supply chain is flexible, responsive, and able to quickly adjust its processes and strategies as needed, ensuring that it remains efficient and effective, even in the face of external disruptions.

Continuously monitor and evaluate

First of all, establish metrics and key performance indicators (KPIs) to track the performance of your supply chain operations. This can include metrics such as delivery times, inventory levels, supplier performance, and cost of goods sold. Then regularly assess your supply chain operations to identify areas for improvement. This can involve conducting internal audits, benchmarking against competitors, or seeking out customer feedback. And when performance issues arise, conduct root cause analysis to understand the underlying cause of the problem. This information can be used to develop solutions and prevent similar issues from occurring in the future.

Build Resilience

Consider risk management strategies and build resilience into your supply chain operations to reduce the impact of disruptions. This can involve working with multiple suppliers, diversifying sourcing strategies, and implementing contingency plans to ensure that your organization is well-prepared to respond to unexpected events. Diversifying sources of supply can reduce the impact of disruptions and increase the overall stability of the supply chain. Develop and implement contingency plans that outline how your organization will respond to disruptions and unexpected events, such as identifying alternative sources of supply, implementing backup transportation routes, or adjusting production schedules.

Implement real-time visibility

Visibility in supply chain management refers to the ability to track and monitor the flow of goods, information, and processes throughout the supply chain. It enables organizations to have a real-time, end-to-end view of the supply chain, from the sourcing of raw materials to the delivery of products to customers. A Deloitte report found that just 13% can map their entire supply chain network, and that up to 22% have no visibility beyond their immediate suppliers. There's a long way to go on supply chain visibility, but digital transformation is crucial if firms are to thrive.

Develop a real-time visibility system

A supply chain visibility system must be capable of capturing information of any kind, from any partner, all in real-time. It must also connect related elements such as shipments, orders, invoices, production status, manifests, and payments – and enable entire partner networks to see and operate based on the same information. It must provide functional capabilities such as proactive alerts, reporting and execution. And, it must be capable of supporting anything and everything in the supply chain while also continuing to evolve with our changing world.

Invest in data analytics

It’s not enough to just have a visibility system. Investment  in data analytics is also important for  organizations to analyze large amounts of data and identify trends, patterns, and areas for improvement in the supply chain. For example, organizations can use data analytics to identify the most cost-effective transportation routes, optimize inventory levels, and improve supplier selection. Predictive analytics is also important for it can help organizations anticipate future trends and changes in demand. By analyzing historical data, organizations can make informed predictions about future demand, allowing them to proactively adjust their supply chains to meet changing market conditions.

In conclusion, collaboration, agility, and visibility are essential components of a successful and efficient supply chain. By fostering collaboration and open communication throughout the supply chain, organizations can improve the flow of information and reduce the risk of disruptions. By promoting agility, organizations can create a flexible, responsive supply chain that is capable of quickly adapting to changes in demand, market conditions, and other factors. And by implementing real-time visibility systems, organizations can improve decision-making, increase efficiency, and reduce costs. By focusing on these three key elements, organizations can build a supply chain that is stable, efficient, and well-equipped to meet the challenges of today's fast-paced and ever-changing business environment.

Wei Zhao
Gülşah Keleş
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Pelico's factory operations management platform empowers factory teams with the agility and resilience to quickly respond to any supply chain disruptions by having streamlined data-based collaboration.
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