Turn Today’s Supply Chain Challenges Into A More Agile Strategy Posted on : Jun 15 - 2020

Amid the COVID-19 crisis, companies are making both tactical and strategic adjustments to their supply chains that could very well set their path for the next decade or longer.

What has impressed me the most is the ability of certain companies to refocus their supply chains on new priorities, like clothing companies shifting to make personal protective equipment and pharmacies pivoting to offer delivery services.

Of course, having a nimble supply chain is an especially important advantage when supplies are harder to come by or when demand spikes or plummets, but such disruptions happen all the time, albeit on a smaller scale. The smartest companies are reworking their supply chains accordingly.

No one understands this new dynamic better than Bob Ferrari, a supply chain industry analyst and founder of The Ferrari Consulting and Research Group and the Supply Chain Matters blog. For the last two months, Ferrari has written extensively about the challenges and provided examples of innovative ways businesses are adapting.

“COVID-19 has laid naked a lot of the supply chain processes that we all thought were OK, although we knew they certainly needed augmentation,” he says. “The timetable for that change has suddenly accelerated.”

New Ways of Thinking

For example, one of the big trends in the last 15 years has been the use of least-cost suppliers in countries worldwide. Most companies also went to a just-in-time inventory model. But without clear visibility into the inventories and production capabilities of all suppliers, and with the transportation and logistics shutdowns that came with the pandemic, these global inventory replenishment methods fell apart.

“For now, supply chain process changes are necessarily focused on the operational and tactical, but if companies make changes today with a long-term focus of moving toward a future goal of integrated business planning, it will be to their advantage,” Ferrari says.

Integrated business planning is about being able to make better supply and demand decisions based on near real-time, accurate, and consistent data—a common data model—from business planning all the way through order fulfillment, Ferrari says. “The visibility across the entire supply chain has to be much more enhanced than it is in many companies today,” he says. View More