The pandemic impacted global supply chains, underlining the associated risks and resiliency gaps for most companies. However, as the effects of the pandemic continue to affect the global supply chain, the question is how should the companies seek to build resilience within their supply chains going forward? This is where the role of strategic supply chain planning comes in.
Although the pandemic continues to disrupt the supply chain landscape with new and unanticipated obstacles to productivity and profitability, some organizations are combating the volatility by making sales through inventory and focusing on their working capital.
Global suppliers and manufacturers have largely been put to the test, thus confronting immense stock shortages, shipping delays, and prolonged backorders on their most profitable inventory items. Research by Gartner suggests that 50% of supply chain companies will invest in applications that support AI and advanced analytics capabilities through 2024.
Here are some of the current global supply chain challenges.
Supply chain planning is the practice of anticipating the future demand for goods and arranging for materials and other components for timely production, marketing, distribution, and sales. It balances supply and demand to scale sales and revenue opportunities for businesses cost-effectively. The core objective of this planning is to optimize the overall performance of the supply chain to achieve desired levels of cost, service, and sustainability.
As customer demands are shifting, a well-established supply chain execution strategy is essential to design a company’s short and long-term business plan to build agile, resilient, and adaptable supply chains. An efficient supply chain planning strategy can help companies to reduce costs, enhance customer service, and strengthen business targets, besides assisting stakeholders to understand historical data and inventory status.
Supply chain and procurement stakeholders must deal with many unpleasant surprises, such as rising supply chain costs, raw material shortages, transportation strikes, and natural disasters. However, the effect of these shocks can be curtailed through competent supply chain planning.
Helps realize the historical data: To ensure that their goals are achieved, companies must understand where they have been in the past. This infers that an organization should determine amount of raw materials from the suppliers and the cost of the previous year. The supply chain firm needs to assess the reliability of the suppliers in terms of promised price and on-time delivery and find out the discrepancies in the last year.
Helps in knowing inventory status: To meet customer demand at a viable profit, every firm needs to be aware of their completed inventory or their raw materials in the supply chain. For identifying this, platforms like TradeEdge can be utilized that enable businesses to find out the exact location of their current inventory stock by communicating with vendors in real-time.
Adapt to shifting customer demands: Companies need to be able to identify fluctuations in prices, delivery, and customer demand promptly to generate profits. With the technologies evolving rapidly, organizations with a supply chain strategy can make active adjustments per their cloud-based systems’ daily report.
Adapt to changes in internal product design and management: Innovative products must be manufactured at an appropriate cost for a company to be beneficial. By applying an efficient supply chain strategy, the designs can be optimized for manufacturing and long-term supply levels.
Other key benefits include:
A strategic approach to supply chain planning can help organizations stay ahead of market competition. It is a tactical business strategy that optimizes the manufacturing and delivery of goods on time, effectively meeting customer requirements. In addition, data-driven supply chain planning lowers production costs, mitigates possible risks, increases sales, and effectively manages relationships with suppliers and vendors.