Let’s be frank. In the last two years’ seismic events such as the global pandemic and Brexit have sounded the death knell for the current supply chain model. Everyone from car manufacturers to fast food restaurants experienced disruption as weaknesses in their business continuity plans were exposed.
It’s clear that we can no longer rely on the traditional route of forecasting what we did last week, month or year as too many of the other parameters have changed. On top of this, the procurement model of chasing the lowest cost per unit has been challenged as businesses scramble to keep their end users happy.
It’s time for a radical rehaul of the supply chain. But what does the new version look like?
We’ve realised that relying on one region for sourcing products leaves us vulnerable. We’ll replace the reliance on East Asia with shorter supply chains.
The reshaped supply chain will be flexible. Components will be sourced from a number of suppliers rather than a single source approach.
Predictive technology is a hugely exciting opportunity. AI enables us to sense demand closer to real time whilst reducing the number of past data points. The ability to predict better in the ever-changing world of demand is a golden ticket for business.
Robotic Process Automation is another game changer. As this develops, we’ll be able to identify how to deliver optimal results by sharing work between man and machine.
The supply chain crisis gives us a real opportunity to reshape and rebuild the existing model. Embracing technology and changing your approach to suppliers is critical to help your business become more resilient. Businesses that refuse to modernise are at risk of further disruptions and challenging times ahead.
Steve Ingram is a SAP retail expert who has over 25 years experience of helping businesses become technology led.