How Do You Improve the Resilience of Your Supply Chain? (2/7)
Serie: Covid-19, what happens next? How to prepare your business in 7 steps | Episode 2 / 7
For several weeks now, the Covid-19 crisis has been hurting small, medium and large businesses. Those who were already setup for online sales may appear to be in a better position, but they too are experiencing many challenges due to the increase in traffic.
We’ve seen a spike in online sales and the questions now become: how do you fill the order placed? How do youensure a continuous supply? How do you guarantee reasonable lead times? How do you manage consumer expectations and not sacrifice your reputation for a disappointing customer experience?
Before the crisis, time-proven contingencies were found all along the supply chain. Today, the entire supply chain is being forced to adapt in order not to break completely.
How the Crisis Impacts Supply Chains?
This crisis highlights the supply chains’ weaknesses: from stock levels to point of sale, product delivery and everything in-between. Every link is under strain and they are putting the supply chain at great risk. There are many issues behind the scenes which are slowing down or even interrupting production to certain suppliers. Social distancing guidelines have slowed productivity, created delays and made some deliveries impossible.
Other difficulties arise as customers cancel their orders due to socio-economic changes or after revising their needs and budgets. There is an unequal competition with big-box stores being able to keep their doors open while smaller stores are kept closed. Not to mention numerous cases of hacking communication platforms, data or transactional sites.
Every new challenge brings additional changes and risks, forcing everyone to adapt and cope quickly! For some companies, the stakes are high, and their economic survival is at stake.
How Can We Adapt Our Supply Chain?
How can we foresee, analyze and mitigate all the risks? Above all, how can we adapt quickly and overcome these difficulties?
Real Time Supply Chain Visibility
One of the most fundamental elements to understand its challenges and adapt quickly is to have a good visibility on the supply chain in real time.
It is vital to understand your business' needs and be able to adapt quickly in regard to possible issues concerning your supply chain. This will ensure you have full control over stock availability. The advantage of a digital supply chain is that it allows you to systematically calculate the supply and demand. Each variable will have an impact on item availability: order delayed, revision of stock, change in projections, everything is taken into account.
The supply and demand calculation is a complex mechanism that requires a powerful and flexible system. It considers all purchase orders, transfers, online orders, reservations, existing stock and future predictions, especially since the calculation has to be updated daily with every single change.
The Benefits of a Digital Supply Chain
The digital supply chain provides the necessary visibility on available inventory and is equipped with reactive and efficient forecasting tools to provide greater flexibility. It allows us to adapt the flow of goods and to make informed decisions in relation to budgets, purchasing and plans the redistribution of stock between stores where demand is located.
The Importance of Demand Forecasting
Current circumstances are proving that all budget projections and expected sales plans may be inaccurate. The first basic principle of demand forecasting is that the past will be a predictor of the future. Regardless of past years and seasons, nothing could have prepared us for the impact and unpredictability on today’s supply chain.
Currently, many predictive tools are available to forecast demand and optimize the distribution network using increasingly advanced algorithms and models. It then becomes a matter of basing one’s supply chain on demand forecasting and testing new scenarios using new data and not just last year’s sales results. The second principle is to recognize any forecast error and correct it as quickly as possible given current information. The systematic calculation and quick reactivity provide digital supply chains a self-righting capability, allowing them to adapt to new unexpected trends.
Resilience and Responsiveness in Day-to-day Activities
Although this crisis is a difficult time for most people, it is also a great opportunity to reinvent oneself. We are seeing the emergence of many initiatives that demonstrate great resilience in business today.
Several of our clients have demonstrated creativity, responsiveness and adaptation to this new situation. Some have set up online stores in record time, others have reviewed their product lines to meet changing demands in this pandemic requiring a new manufacturing chain to be established in a few days. Others reached out to their customers by offering targeted products and services via new marketing channels such as telephone campaigns, telecommunications tools and social networks.
It is therefore essential to be well equipped and demonstrate an excellent capacity to adapt to overcome times of crisis. This agility can be greatly facilitated by a controlled and responsive digital supply chain. This has enabled our customers to stay on course and maintain control of their operations in the face of the major changes we are currently experiencing. High-performance solutions already exist on the market to help your business survive and Createch is there to support you in the logistic performance improvement.
Discover the topic: Covid-19, what happens next?