My last 3 blogs have gone into elaborate detail about New Year recommendations for supply chains – I’d like to summarize and give a final ‘tip sheet’ on my take for supply chain recommendations for all 3 categories I reviewed. The categories are profitable proximity, risk management, and customer focus. As presented before, my launching point was the supply chain trend predictions as offered by 4 groups: Gartner Analysts, IDC, Ferrari Group, and SupplyChainBrain. I looked at our client and other industry experiences as relating to all the trend predictions, and created a ‘best of’ list of supply chain recommendations to get you off to a competitive start that is measurable and offers a critical return on your investment. As I alluded to, I believe that if you are going to prioritize only one of the three areas, I would choose customer focus.
Listed below are my recommendations.
Profitable Proximity: “The World is Flat”
1. Using the newest profitable proximity guidelines, design a network that makes the most sense for your organization.
2. Consider costs of sourcing, distribution, transportation, and warehousing to come up with the best total costs.
3. Factor in the risks associated with network as part of the cost, such as delayed lead times. Business planning counts as a cost!
Risk Management: “Trust but Verify”
1. Identify all risks, including disasters, economic, human resources, customer demand, and never overlook: your competitors!
2. Build, evaluate, or enhance your supply chain foundations of visibility, problem response flexibility, close collaboration with suppliers, control processes, and first-rate customer demand planning to ensure effective resilience measures.
3. Mix resilience planning and business planning functions. Communication between stakeholders is a cornerstone, and is the glue that keeps the wheels turning during a crisis.
4. Large or small, do what you can on the spectrum from identifying your risks to planning responses to practicing scenarios of those risks occurring. Choose a director to lead and track the progress metrics.
Customer Focus: “The Age of the Customer has Arrived”
1. Build a talented supply chain team that will innovate for the customer’s needs and collaborate internally to build brand loyalty, and design your supply chain with demand volatility and customer satisfaction in mind. See if supply chain segmentation can turn your customer focus into supply chain success.
2. Keep your finger on the pulse of the customer, and your competitors, and listen for cues to market demands, delivery competition, and customer satisfaction ratings. Using a demand-driven strategy in your supply chain helps you focus simultaneously on profitability and the customer.
3. Forecast demand to achieve optimal inventory in existing and new products, with priority toward maintaining and growing customer satisfaction. Use all methods available to increase your forecast accuracy, including external indicators.
Supply Chain Recommendations – My Takeaway
Always bear in mind that your own resolution to succeed is more important than any other.
– Abraham Lincoln
Will these supply chain recommendations be evergreen, or be surpassed by different ones next year due to shifting environments and priorities? Only time and experience will tell. For now, differentiate yourself from your competitors by being proactive and addressing the top supply chain problems.
I am always looking for tools from experts to make my job easier, especially in our fast-moving technology space. Here are 3 excellent resources that have helped others, and could help you, to get started on these supply chain improvements right away.
Primer on profitable proximity: (Manufacturing Insights)
Supply Chain Risk Self-Assessment: (Supply Chain Risk Leadership Council)
Online Customer Survey: (Marketing Profs)
What do you think about these overall recommendations? Have you used any of these techniques, or do you have suggestions of what is working better for your organization?