As we approach the third year of the COVID era, businesses throughout the world face an all-too-familiar set of supply chain challenges: supply uncertainty, capacity and labour shortages, extended transit delays, and sky-high transportation charges. Supply networks have become the scapegoat for a variety of issues, yet despite the negative coverage, many businesses are successfully managing supply chain stress.
Difficult circumstances necessitate new approaches. Here are some pointers to help firms negotiate the new normal as they strive to rebuild their supply chains for greater success in the post-pandemic world.
If supply chain interruptions are discussed over the dinner table, the boardroom should pay close attention to the issue.
Formerly, board rooms would only focus on supply chains when a specific problem developed. Businesses whose boardrooms have traditionally prioritised supply chain robustness as a competitive differentiator are better positioned for the current demand cycle.
However, more robust supply chains are sometimes more expensive, causing many company boards to oppose the investment. Taking a long-term perspective, however, better-balancing robustness, operational profits, and asset inefficiencies will result in a more resilient system with a stronger value offer.
Demand planning may be automated using enterprise resource planning (ERP) software. Incorporating ERP software as a supply chain management approach is frequently a best practice for firms facing fast changes in product demand. Uncertainty modelling may be integrated into the ERP system to support a variety of supply chain planning applications. You may also generate optimal inventory objectives using demand forecasting, inventory control, and replenishment.
Companies with strategic ERP systems have an impact on current supply chain concerns. We think corporations correctly forecast the 2021 demand from the re-opening of COVID-19 and are revising worldwide stocks to match the need. Regrettably, the supply system was unable to keep up with the increased demand. The supply chain can only develop at a rate of 3% to 5%, therefore when demand exceeds this level, there is friction in the system.
You can swiftly respond to supply and demand cycles if you have insight across the supply chain. You’ll be able to respond more readily if the global supply chain is disturbed and the logistics stream backs up. The heart of any supply chain is sales and operations planning. Many businesses have not invested in the technology necessary to modify sales cycles. Those who have invested in technology have been able to profit from the current inflation cycle.
Demand forecasting is followed by production and inventory management. Businesses that invested in visibility software were able to manage production and inventory during the COVID-19 shock and are currently handling the current inflation demand cycle better.
When we look at the current situation of global supply chains, we see a glass half full rather than a glass half empty. Notwithstanding the media coverage, global supply networks and the industries that rely on them have demonstrated remarkable resilience in the face of COVID-19 and reopening. Businesses that are struggling should reconsider their supplier networks and contact the best supply chain consultants in their city.