Pandemic did devastate the supply chain network in many ways. On the better side, it supported the industry’s rapid digitalization. Many capabilities of supply chain got augmented thus. Real-time order monitoring, end-to-end inventory visibility and super-reverse logistics experiences are just a few examples. Now, as we celebrate 5G roll out, it is expected to add dimensions to the supply chain’s building back. 5G could be leveraged across the supply chain – from design to distribution and sales so that the digital supply chain becomes a reality soon.
Intense global focus on supply chain management (SCM) in the post-Covid business environment is due to the devastating impact of the pandemic. Shortages, inflation and recession-risk posed major challenges to ensure profitable growth. Against this backdrop, Gartner organised a webinar on 16th August, 2022 to identify the issues involved and the possible initiatives and leadership actions to negotiate the growing challenges in SCM. Three performance lenses were focused for balancing the supply chain cash flow and cost through possible tactical and strategic actions.
The Lens focus: With a view to deliver cost-optimized reliable product and service,
- One lens focused on the financial aspect of SCM cash-flow and cost
- Second lens emphasised on the operational issue of optimizing the performance network.
- Third lens looked at the commercial aspect of profitable growth
The Approach: Telescoping the emerging SCM scenario, it was suggested to
• Encourage digital innovation and orchestration and make the supply chains contemporary.
• Develop demand-driven capabilities to ensure SCM efficiency.
• Facilitate strategic transformation to achieve sustainable eco-system value.
The Lesson: Supply and distribution networks are complex systems in a dynamic environment and the associated business challenges drive short-term pressures and conflicting messages. Consequently, the situation is severely impacted by the constraints and risks, demand signal volatility and resource instability. It was emphasised that inventory and cost create negative energy, resulting in anxiety, conflict and resistance to deliver product and service reliably. Therefore, complex systems need comprehensive methods.
What to do?
Supply chain leadership actions call for:
- Adopting an operations focus on total network performance
- Developing messaging on the need to balance short-term cost and cost pressure with optimized performance for profitable growth.
Therefore, need is to define and measure, analyse and plan and finally implement and control the supply chain performance network.
Tactical Actions: To manage network performance comprehensively,
- Diagnose and address losses and failures
- Develop network supply planning capability
- Pursue inventory excellence through cost-optimized product and service delivery and risk-optimized growth events such as minimising waste and obsolescence
- Adopt an operating focus on total network performance that reliably fulfils demand
- Develop messaging on the need to balance short-term cost and cash pressure
Strategic Actions: To drive performance breakthroughs through aligned design choices and capability investment,
- Focus on lean, resilient and agile SCM network to deliver operating outcomes that fulfil demand
- Align distribution network and service offerings
- Align organization structure, incentives and governance
- Invest in designing product portfolio and supply network
- Invest in technology-enabled process capabilities
Conclusions
- The limits of supply chain capability and impact on performance should be communicated to stakeholders
- Pursue clarify on required supply and service performance to service each demand segment
- Propose design changes for improved alignment and better performance
- Direct investments towards capacity and capabilities that elevate network performance for profitable growth.
Learners’ Opportunity
5G technology will open-up a plethora of opportunities across the supply chain industry to innovate and drive operational excellence. MBA degree provided the edge to leverage these opportunities. For more details check our program @https://online.ifheindia.org/
Discussion Question
Do you agree, 5G roll out would be a game changer for the supply chain industry? Why?
Key Words
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