What is required to unlock the next stage of supply chain evolution ?
By Sateesh Seetharamiah
Fragmenting demand , rising supply chain complexities , and the need for resilience and responsiveness in the face of disruption are catalyzing a shift in the fabric of the global supply chain . The Covid-led disruption in 2020 was unprecedented for global supply chains , especially for retailers and consumer goods manufacturers ; the stakes have altered considerably .
Surveys from several consulting firms show that the preference for online shopping is here to stay . This has led to an unparalleled fragmentation of demand where the demand signal comes from each customer ’ s doorstep . Moreover , even next-day delivery comes too late in the age of instant gratification . For manufacturers , not clued into their real-time supply chains means frequent out-of-stock situations , losing business to competition , and suboptimal inventory management . For instance , during the Covid crisis , 72 percent of retailers experienced multiple stock-outs for fast-moving products . We all remember the toilet roll runs ! Fittingly , the top priorities for supply chain digitalization have become demand planning ( 74 percent ), supply planning ( 69 percent ), and inventory optimization ( 58 percent ).
The key to building faster , flexible , and traceable supply chains
While manufacturers are adapting to these shifts , Gartner found that 70 percent of supply chain leaders have not been able to align strategy with operational execution . One of the reasons is the lack of end-to-end visibility and intelligent solutions that help real-time action . To make effective decisions regarding product stocking , holding , recall , and other operations , you need to know what is happening at every point in your supply chain . That kind of granular visibility and traceability – beyond Tier 1 and Tier 2 suppliers – at the SKU level goes a long way in building resilience . According to a McKinsey survey , companies with end-to-end supply chain visibility were two times as likely to report having no challenges from 2022 disruptions .
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