THE highly volatile and unpredictable business environment is upon us. We have learnt that volatility is not an anomaly; it is a constant never to be underestimated.
We are living in a crisis-plagued business environment. Exceptions are no longer the exception; they have become the norm. Predicting what will happen tomorrow with total certainty is a big asks.
Supply and demand uncertainty is always in our midst. Cost pressures are clogging every supply chain touch point. The unpredictable availability of raw materials is now a pain point.
The unbelievably high transportation costs are now a pain point and so are increasing demands from irate customers. Supply chains are overwhelmed.
As screws are getting tighter and tighter, it calls for a mind-set shift. Clouded by such kind of problems, supply chain optimisation could turn out to be what the doctor ordered.
Forward-thinking supply chain professionals are constantly looking at redesigning and transforming supply chains with a view to respond to market shifts.
Supply chain optimisation has been on the edge of conversations for a long time, with supply chain professionals making efforts to keep it in motion — and on time.
Optimisation of the supply chain network will attempt to look at every possible pull back factor in business and developing solutions to plug the yawning gaps. Supply chain optimisation strategies ensure that there is always flexibility and agility, which enables the business to make proactive business decisions.
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Benefits associated with optimisation of the supply chain include increased collaboration between and amongst departments and improved collaboration between supply chain partners.
Collaboration will assist in the streamlining of business processes, which will in turn increase efficiency levels resulting in increased revenues and profitability levels, while at the same time improving customer satisfaction levels.
Other known benefits of supply chain optimisation include greater agility and flexibility in operational activities. In today’s demand driven economy, optimisation of the supply chain has since moved from a theoretical textbook concept to a practical business tool that is credited for improving agility in decision making.
An optimised supply chain business model creates an enabling platform to maximise profits at every supply chain node of the business while at the same time minimising operating costs by minimising waste.
Supply chain waste takeout is clearly one of the key objectives. Optimisation of the supply chain has, therefore, been credited for reducing total cost, cutting cycle time, improving customer service levels and driving revenue growth.
It will, therefore, allow supply chain professionals to do more in less time, with fewer resources, with less effort, creating a lower cost operating environment.
We herald a new era of emerging technologies. The rise of digital transformation will always add a fresh perspective to supply chain optimisation.
The use of emerging technologies such as artificial intelligence, machine learning, the internet of things and block chain are today’s imperatives.
They can be reliable upon to boost efficiency levels in an organisation. Supply chain optimisation allows the business to make better decisions on the go through the use of technology by ensuring that business decisions are always current and up to date avoiding decision-making based on outdated information.
A supply chain that is anchored on the foundation of modern technologies can easily provide a pictorial view of the end-to-end supply chain touch points providing valuable insights into what is happening throughout the chain.
An optimised supply chain will facilitate supply chain professionals to work smarter not harder. Smart technologies are highly regarded as guiding precepts of an efficient and optimised supply chain network.
We know technology drives anything and everything. There is need to automate those processes that are generally regarded as repetitive and redundant.
This will increase process efficiency leading to a significant reduction in costs. Advances in computing power and widespread connectivity allow business organisations to collaborate at a scale that was not imaginable a couple of years back.
Technology is, therefore, connecting supply chain professionals, supply chain partners and their various devices in a wide web of business networks and ecosystems enabling the business to keep an eye on the ball.
Forecasting is also very important in supply chain optimisation processes. An optimised supply chain system relies heavily on accurately forecasting of demand and production of goods that are aligned to changing customer demands, giving customers what they want when they want them.
Forecasting will allow the business to make informed decisions based on factual data. It relies heavily on a clear understanding of product seasonality and identification of usage and or consumption patterns.
Accurate demand planning is, therefore, an important part of supply chain optimisation. There is need to identify changes in trends before things start happening.
It will significantly assist the supply chain professional to have a bird’s eye view of the entire supply chain, allowing the business to make informed decisions on the fly. Better data insights translate into better business decisions. This will promote significant wins in multiple ways.
Sustainability issues are key in supply chain optimisation. Today’s socially conscious customers expect supply chain professionals to have a sustainable supply chain network.
The global trade theatre seeks to deal with supply chains that are highly sustainable. Reduction of the carbon footprint is important. Sustainability practices are getting airplay everywhere you go.
Eco-friendly supply chains are regarded as strategic imperatives. The on-the-ground benefits are there for all of us to see. Increased visibility of sustainable supply chain practices has become the need of the hour.
The spin-offs are glaringly there for all of us to appreciate. There is no escaping today’s reality that sustainability is probably the only way to future-proof your organisation against potential risk. It can be the difference between a supply chain that sinks or swims.
Supply chain professionals across the industry divide are, therefore, encouraging supply chain partners to pull their weight to contribute to sustainability.
Supply chain professionals are mindful of the need to consider carbon footprint levels by ensuring the greening of the supply chain. Sustainability issues are slowly moving away from being a moral imperative to a strategic imperative.
It is slowly being recognised as important by those who are genuine optimists at heart. They believe sustainability is a strategic business imperative for the benefit of humankind.
The optimism to believe that the world will one day have clean air, water, energy and space is highly commendable. Nothing is more salient in today’s business environment than the need to believe in such ideals.
Such optimism is true capital to business success. Sustainability issues should underpin everything we do. But it needs everyone to have the same train of thought. We need to collaborate. The whole is greater than the sum of its parts. After all, when all said and done, the sum is always superior to the constituent parts.
Everyone who is part of the chain must remember that sustainable issues require the collective approach. Every one of us must act as an exemplar.
Everyone must be reminded and remember that the green line is just as important as the top and the bottom lines for companies. We need supply chains, the world over, to transition into the circular economy.
There are obviously incredible highs and lows as we navigate our way into sustainability, but our roles must change from being observers to contributors as we work to find innovative ways to overcome or sidestep sustainability challenges.
For a business to be both profitable and sustainable, you must put people, planet and profit on equal footing.
The modern-day supply chain network is increasingly becoming global, complex and diverse. But the expectation from supply chain optimisation principles is that all supply chains must be agile, efficient and flexible to meet the diverse challenges.
The argument is that every supply chain must focus their attention on pain points that hinder the free movement of supplies to the customer. The optimised supply chain networks are not only designed to realise the lowest cost possible but to also meet customer expectations within reason, thereby promoting service levels that are optimal.
Supply chain professionals must see the end from the beginning making long-term thinking their forte. This will allow the delivery of customer superior experience that captures the next dollar.
In conclusion, it must be noted that supply chains are increasingly beholden to the ever-changing dynamics of world trade; hence supply chain optimisation will not come easy. There is work to do. There is dignity in labour.
There is no sugar-coating required. The greatest improvements will often happen in discomfort. The best-practice approach for supply chain professionals should be to fold their sleeves to do more work on supply chain optimisation.
It will enable supply chain professionals to create a playbook for the future. An optimised supply chain should never miss a business opportunity, it should never miss a customer’s expectation and it should never disappoint.
It should always create a successful customer experience.
With an optimised supply chain, the business is able to balance the many moving parts to good effect. It will enable supply chain partners to stress test the system for supply chain disruptions.
Supply chains must be regarded as a source of value creation and potentially differentiating competitive advantage. Surely, there is no single playbook to guarantee success at the global scale.
But supply chain optimisation will try. Granted, supply chain professionals have a long road ahead of them, but they must be seen to be putting one foot in front of the other on the path to setting new standards for their organisations.
The paradox of true strength is being able to face your weaknesses and always volunteering to put your best foot forward.
Supply chain professionals will be encouraged to iterate on their supply chain optimisation strategies, in cooperation with other supply chain partners, with a view to continuously improve the supply chain design.
Supply chain optimisation must be regarded as a marathon, never as a sprint. The race is still in the first lap and the route promises to be long and arduous.
But the big-picture mentality will encourage supply chain professionals to be prepared to handle all things that are out of turn in concert with others.
Generally, without collaboration, there is not much space in the room to identify the bottlenecks that are likely to hold back the efficiencies associated with a robust supply chain optimisation process.
It is a poorly kept secret that supply chain professionals are key to this process.
- Nyika is a supply chain practitioner based in Harare. — charlesnyika70@gmail.com
