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Interview
Visibility is equally important . Not only are supply chains global , they are also complex with numerous tiers and interconnections
relevant information that may require mitigating action ,” she continues .
Looking at the supply chain in a wider context , Prerna highlights that many challenges are inherent due to the globalized and complex nature of today ’ s world . “ There was a time when everybody was buying fairly locally ,” she explains , “ but then , the focus moved to sourcing from China and further afield . In recent years , that trend has reversed somewhat , but by and large , supply chains are still global . Consequently , they are exposed to all sorts of geopolitical issues , and operational agility is a necessity . As such , scenario planning is crucial for a robust supply chain .
Scenario planning
“ Visibility is equally important . Not only are supply chains global , they are also complex with numerous tiers and interconnections . Being able to see through these different layers and understand the intricacies is increasingly important . Lastly , inflation and price pressures , in terms of the cost of raw materials as well as energy and labor markets , present an additional challenge . While some categories can still be leveraged for lower prices , in the main , supply chain costs are increasing , and I anticipate that this will continue to be the case for some time to come .”
Disruption is unlikely to disappear and for Prerna , organizations should concentrate on making their supply chains as agile as possible . “ Scenario planning can ensure that you are not caught off guard when an event does happen . For example , a few years ago one of our clients , a global , alcoholic beverage company , came to us for help mapping its supply chain . While nothing particularly disruptive was occurring at the time , the organization wanted to look at its raw materials suppliers to see whether alternative sources were available as an exercise in proactive scenario planning . As one of the top ten alcoholic beverage companies in the world , it has a massive footprint with multiple suppliers , but with one ingredient produced in only two countries , we were able to identify a potential risk . Consequently , the team was able to start strategizing around that scenario ,” she emphasizes . “ This occurred at a time when disruption was not as prevalent as today , so it ’ s a good example of getting ahead of the game , gaining competitive advantage , and not firefighting .
“ Progressive procurement teams are great at creating better relationships with their stakeholders and suppliers ,” she concludes . “ Procurement leaders are good at leveraging intelligence companies to empower their people to do their job well . While their team should have the right mindset to use data , they should not be expected to know how to develop an algorithm . Progressive organizations clarify what their teams should be doing and bring the tools and external support on board to empower their people .” ■
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