While many of the last decade‘s advancements in technology are apparent, shifts in supply chain strategies are perhaps less blatant but just as noteworthy. Given the current economic uncertainties and challenges facing supply chain operations, it‘s an excellent opportunity to revisit the evolution of supply chains over the last decade, including the way managers overcame the challenge of the 2008 financial crisis.
During that period, which “challenged supply chains globally beyond anything observed in the past,“ according to Supply Chain 24/7, the manufacturing industry was hit heavily. Global exports dropped 12%, forcing SCMs to find solutions. As usual, companies that embraced innovative, long-term plans weathered the storm better than those who overreacted quickly. One German auto supplier shut down one of its production sites, refocused its efforts to low-cost countries, and laid–off employees to match the decreased demand. It backfired almost immediately, as they lost not just profits but knowledge, eventually falling just short of filing for bankruptcy.
The more successful companies planned ahead first by looking back, pinpointing historical and current trends, and communicating with customers to realistically forecast demand. They took precautions to avoid surplus inventory. Perhaps most critically, rightfully assessed that conditions would improve soon enough, retaining employees and setting into motion plans that could take effect when the market allowed.
The situation is similar today. While nobody can pinpoint when things will return to “normal,“ the economy will rebound, and your organization must think positively and with determination. Reach out to the experts at Katalyst to develop the strategies that will set you on the right track for current and future success.
Analytics
Technology and strategy often have a chicken and egg relationship—new ideas emerge as technology improves, and that in turn inspires mechanical and software innovations. Once companies learned about the advantages of analytics in the supply chain, more advanced methods sprang up. Perhaps paradoxically, these processes also became more user-friendly and accessible.
“Having access to data is everything,“ says Tracy Warren, Manager of Delivery & PMO at Katalyst Technologies. “One of the best adaptations in the supply chain has been making data analysis more of an everyday thing, not just something left to facility engineers and managers.“
Specifically, the rise of prescriptive analytics has allowed enterprises new opportunities to play with their data and explore a variety of “what if“ scenarios. While there may be some apparent necessities in limiting certain sensitive information, the more people who have control and access to data within an organization, the more likely it is that you will come across bold solutions.
“Putting [data] into the hands of those who need it and giving them a creative and unique way to use it is how we become world–class,“ says Warren.
Sustainability
Going green is now the gold standard. As one supply chain operator told Katalyst, “You never want to be anti-environment.“ In the early part of the decade, about a third of companies had concrete goals to reduce their carbon footprints. Now, that number is closer to 90%.
Those goals may have initially been for PR reasons—81% of global customers “feel strongly” that companies should do their part in improving the environment—but as companies adopted these strategies, they also found that going green saves a lot of green.
E-commerce
In 2010, online retail accounted for 6.4% of sales. By 2019, that number had more than doubled to 16%. Though projections have always indicated that the industry will grow further in the next decade, current circumstances may speed that along much faster than anticipated.
“I feel like we are here right now, in 2020, on the verge of a major shift which might have otherwise taken another ten years,“ says Warren. “I fear that we’ve been catapulted into the socially distant future where we continue to do most of our shopping online. Companies who are successful through this will have a strong e-commerce program already in place and be able to respond to the changing landscape.“
Demand for faster (and more sustainable) shipping has completely altered the final stages of supply chains. Companies have gotten inventive when it comes to last-mile delivery and return policies. Now it seems they will need to innovate further to maintain a competitive edge over not just fellow online retailers, but brick and mortar stores once they reopen.
Curious what the next decade holds for supply chains? Check out Katalyst‘s three-part series of expert predictions.
