Kelly Thomas, Company and Board Advisor and Anand Medepalli, Chief Product Officer for Shippeo and Technical Editor for ITM explores the resilient supply chain.
Supply chain disruptions have a massive impact on companies’ top and bottom lines. Of course, this also applies to the disruptions caused by the Coronavirus pandemic, additional red tape following Brexit, and more recently the war in Ukraine. These crises have highlighted how supply chains are structured, how they’re run, their vulnerabilities, and how these vulnerabilities can affect us as individuals, as society, as economies, and as countries. They have also shown once again that, in order to stay competitive and satisfy new customer demands, companies need to adapt business models and operational strategies.
But what are customers’ demands? And what technology is necessary to fulfil these demands? Over the last 10-15 years, the change in supply chains has been driven by technology in the hands of customers – literally, in the form of smart phones. This has given the customer tremendous power and access to supply chains, 24/7 and 365 days per year, which in turn has had ripple effects all the way upstream. Customers have come to expect lots of choices, in terms of products, product contents, product size, and delivery techniques – all the things that we’re used to on the consumer side, and all for free. They want precise products, tailored to their needs, delivered to them in increasingly precise delivery windows. This trend was upended by the pandemic, but it is continuing and market leaders are investing in this trend.
Precision requires visibility
The precision required to fulfil this demand requires high levels of visibility – customer expectations, of markets and competitors, of how business activities affect the environment, the risks inherent in the supply chain, of demand and supply, and of the impact of a supply chain’s structure and policies on its performance. Running businesses and supply chains is all about making and fulfilling commitments to customers regarding how much product will be delivered, where it’s going to be delivered, at what time, and at what price. A company can only reliably make these commitments when it has visibility of how it is performing against those commitments. Over the past five years we’ve seen the connection of assets, products and materials to visibility platforms, which helps to supply data to other areas of the enterprise, where they can add value and facilitate decision making.
Customers want ESG compliance
Another thing customers increasingly demand is environmental, social and governance (ESG) compliance, which will have to be taken into account in all decisions. This area has been on a slow burn for years, but is really starting to coalesce and take fold at leading companies. Reporting no longer focuses only on the profit a company generates, but on the ESG impact of a company’s activities. These criteria have to be built into supply chain systems and software. Supply chain operators will need all the critical capabilities provided by improved visibility and collaboration if they are to progress in all of these areas, starting with measurement and moving these measurements into supply chain management processes just as much as customer service, inventory levels or return on investment measures.
To read more exclusive features and latest news please see our March-April issue here.
Rebecca Morpeth Spayne,
Editor, International Trade Magazine
Tel: +44 (0) 1622 823 922