5 Supply Chain Strategies To Avoid Risk And Enable Sustainability
I have just finished reading a new Oxford Economics study of 1,000 supply chain executives across the world, where all these topics were in play, and some common themes emerged.
- Challenged by rising customer expectations for quality products and services, but at increased speed.
- Searching for the value of strong collaboration and clear visibility across the supply chain in meeting the customer needs.
- Intelligent technologies are a means of reducing risk.
- Increasingly aware of the importance of sustainable operations.
The need for speed
Like Maverick (from Top Gun), supply chain executives “feel the need, the need for speed”.
40% of respondents identified Real-Time responsiveness as one of the top challenges, and meeting customer demand (34%) was close behind.
This results in counterintuitive needs of having to deliver higher quality products and services, while increasing the speed of interactions. Oh yes and do it sustainably.
The value of collaboration and visibility across departmental and company boundaries
To meet customer demand for speed, supply chains must operate as an agile network to maximize efficiency. Executives in the survey agree that to move fast all silos across the supply chain must work well together. Over half of the respondents (54%) have a defined strategy for their supply chain—but a similar percentage (52%) also say improving supply chain collaboration internally and externally would protect the business from inherent risks.
Technology will help improve risk-resiliency
Many organizations expect geopolitical changes to have a negative impact on their ability to deliver high-level customer experiences (43%). Over half feel creating a more regional or local network of vendors and suppliers could address this issue (53%), while two in five say diversifying their sourcing strategies would have the same effect (43%).
The top ways to reduce risk and continue to deliver high-level customer experiences where to onshore or nearshore different stages in their supply chain (50%), change the product or service delivery process (49%), and adjust how they forecast supply and demand (46%).
And how do they expect to do this? With the help of intelligent technologies, such as AI, ML, or predictive analytics.
Over half of executives (57%) have already deployed intelligent technologies in their supply chain . The expectation is that their tech investments will streamline processes (46%), enable predictive analytics (40%), improve visibility into supply and demand (37%) and supply chain operations (37%).
Sustainability is good for the environment, moral and business
The conundrum is that not only do their customers expect high-quality, accurate, and speedy service, but also demand cleaner, sustainable operations. A little bit like having their (guilt free sustainable) cake and eating it too!
But there are companies showing how this can be done. The study identified a group of respondents as sustainability leaders who have “taken extraordinary steps to achieve sustainability excellence throughout their supply chain”. These companies are more likely to view their supply chain as a competitive differentiator (60% vs. 47% non-Leaders) and are more likely than non-Leaders to put supply chain executives in positions that influence overall company strategy (72% vs. 47%).
They also put the customer first with 69% basing most of their product value chain decisions on what their customers need (vs. 47% non-Leaders), and this is paying off when it comes to seeing rising customer satisfaction (60% vs. 48%).
A sustainable company is also a happier company, as they are more likely to have seen significant boosts in employee satisfaction (24% vs. 13% non-Leaders).
And sustainable actions are having a positive impact on how the company is perceived with both market share (31% vs. 14%) and brand perception (60% vs. 49%) on the rise.
Building a resilient and sustainable supply chain to future proof your business
The report wrapped up with a few recommendations for companies who want to strive to be leaders in their space:
1. Put supply chains at the heart of your business strategies
Recent events and crises have shown that creating a risk resilient supply chain capable of predicting and adapting to any situation is the difference between thriving and just surviving. Strategies to source and manufacture products and goods closer to the actual demand is a good first step.
2. Future proof against risk
Executives know what supply chain risks threaten their business better than anyone. Putting real-time and accurate data—from all nodes and tiers of the supply chain—into the hands of supply chain practitioners will provide the visibility to make timely and intelligent decisions.
3. Unleash the power of collaboration across your network
Breaking down silos across both departmental and company boundaries enables more informed and collaborative end to end business processes. Visibility across the supply chain is a key enabler to solving todays and tomorrow’s business issues.
4. Leverage intelligent technologies to drive business and process innovation
Increase productivity and efficiency by automating repetitive tasks and processes. Leverage machine learning algorithms to detect patterns, risks, and opportunities not visible to the human eye. Empower users with predictive analytics and decision support tools, and act on the data these new capabilities provide. Adopt a sustainability-first mindset.
5. “Going green” must become more than a buzz phrase
Sustainability should be embedded into every process across the supply chain. Building a reputation as a conscious enterprise—and creating a loyal, satisfied customer base—is the sort of resiliency that can endure any challenge.
To learn more about how to get on the path to a Risk Resilient and Sustainable supply chain, download the Oxford Economics Research.