Five Actions for Supply Chain Leaders in 2021
Supply chain leaders need to take these five actions on behalf of their companies to improve operational efficiencies and advance better customer service in the coming year.
2020 showed the world the importance of supply chains having the agility to pivot in response to changes in demand and supply. Looking ahead to 2021, supply chain agility is just as critical to remain responsive and cost effective. That’s why supply chain executives need to make crucial adjustments to ensure their supply chains are agile and efficient in a volatile business climate.
Five Actions for 2021
1: Make data flow transparent among trading partners
The impact of the COVID-19 pandemic on supply chains pinpointed the need for supply chain visibility across the extended enterprise. Visibility allows your business to pivot in concert when responding to unforeseen demand and operational issues such as supply shortages or transportation delays. When supply chain leaders talk about needing enhanced supply chain visibility, they seek visibility into real-time information from their trading partners to support a responsive, agile supply chain. That visibility requires the ability to readily connect your trading partners, transform your data, establishing a single system of record with real-time data access. This enables easily accessible information that readily flows in both directions. The result? A transparent supply chain that paves the way for improved performance and more responsive customer service.
2: Digitizing processes for efficiencies
Supply chain transparency of digital data through integration enables real-time data flows allowing digitalization (digitized processes) to occur in areas such as purchasing, manufacturing, logistics, warehousing, and fulfillment. By adopting digitalization, companies can quickly adjust production schedules, reschedule deliveries, and reallocate inventories in response to changes. The benefit is a transformation that improves overall supply chain performance, supports efficiency gains, improves fill rates, reduces stockouts, provides costs savings, and promotes higher levels of customer service within an extended enterprise as well as enabling better decisions in real-time. Add in alerts and notifications to the right person for predetermined conditions and you become more efficient in responding to issues before problems impact your operations.
3: Use predictive & prescriptive analytics to guide decision making
As companies share more information among trading partners, their data pools expand within the companies’ supply chain ecosystems Using this data with predictive analytics within an extended enterprise allows companies immediate access to the status of forecasts, orders, inventory, shipments, and other transactions to better plan and address out of tolerance events. Add in alerts and notifications to respond and to guide decisions to better respond to sudden demands, unexpected production issues, changes in supply, or transportation delays, and more and now you have more time to spend on more strategic activities.
Facilitated by a digital dashboard for easy-to-read information, predictive and prescriptive analytics allow you to focus on key activities having the highest impact on overall supply chain performance. For example, using key performance indicators (KPIs) you readily identify areas needing attention or requiring modifications. Using a range of prescribed actions through your established business rules or leveraging recommendations based on machine learning you grasp at a glance what’s taking place in your supply chain to make appropriate business decisions and drive optimal outcomes.
4: Leverage each supply chain node for the lowest “cost-to-serve” fulfillment
With rising online buyer expectations for faster delivery and better service, companies seek a balance between servicing higher order volumes with compressed order-to-delivery times while controlling fulfillment costs. By using transactional level details (such as order changes, SKU level demand patterns, or shipment lead times, etc.) along with analytics to study the tradeoffs, you determine which set of customers or trading partners can be served the most efficiently from a particular node in your supply chain.. In some cases, it may make more economical sense to drop-ship from a supplier or a third-party logistics provider’s location while, in others, a central distribution center or perhaps a forward stocking or local fulfillment depot is the answer.
5: Focus on the business “experience”
As the practice of using performance ratings spreads from business-to-consumer to business-to-business, manufacturers, suppliers, wholesalers, and retailers must now pay closer attention to providing a positive business experience. In the B2B environment, companies can expect to find themselves graded with business scorecards for meeting expectations and supply chain performance in such areas as offering the customer real-time inventory visibility, up-to-the-minute shipment status, and providing your own rapid fulfillment metrics or other pertinent KPIs. Without data flow transparency in the supply chain ecosystem and visibility of pertinent KPIs, companies won’t be able to provide the required business and customer experience or even know how they are performing in order to improve these metrics.
By taking the five actions presented, supply chain leaders ensure that their companies can leverage their supply chain as a competitive advantage while remaining agile and responsive. Activ Technologies offers a cloud-based, multi-enterprise platform that digitally transforms supply chain processes and presents a pathway for supply chain transformation.
Download Activ’s eBook, Your Roadmap to Supply Chain Digital Transformation.
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