Executive Briefings

Can Better Supply Chain Planning Keep Effects of Stagflation at Bay?

What should be done to protect the economy from a long-term outlook of stagflation? Unfortunately, it seems that it is practically unavoidable because the drivers are difficult to reverse. However, the period of stagflation may be shortened if investments are geared toward revamping and improving supply chains. More than ever, businesses need to develop and assert clear leadership in this field. That requires understanding the supply chain and its impact on the overall organization.

Global supply chains have become increasingly complex. Untangling these complexities and, where possible, streamlining the supply chain should improve its manageability and protect it from unexpected surprises that can result from hidden dependencies.

Communication and cooperation on issues such as dealing with or hedging against price pressures, demand forecast, short- and long-term production, capacity, and logistics planning as well as inventory management are key success factors to manage uncertainty throughout the entire system. A supply chain is a system of dependent events, and the outcome of one entity always depends to some degree on the actions of all others. To optimize a company's position within the supply chain, improvements need to be made to the system as a whole. Local optimization - even if it looks beneficial from the viewpoint of an individual company - can jeopardize the system's integrity and function.

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What should be done to protect the economy from a long-term outlook of stagflation? Unfortunately, it seems that it is practically unavoidable because the drivers are difficult to reverse. However, the period of stagflation may be shortened if investments are geared toward revamping and improving supply chains. More than ever, businesses need to develop and assert clear leadership in this field. That requires understanding the supply chain and its impact on the overall organization.

Global supply chains have become increasingly complex. Untangling these complexities and, where possible, streamlining the supply chain should improve its manageability and protect it from unexpected surprises that can result from hidden dependencies.

Communication and cooperation on issues such as dealing with or hedging against price pressures, demand forecast, short- and long-term production, capacity, and logistics planning as well as inventory management are key success factors to manage uncertainty throughout the entire system. A supply chain is a system of dependent events, and the outcome of one entity always depends to some degree on the actions of all others. To optimize a company's position within the supply chain, improvements need to be made to the system as a whole. Local optimization - even if it looks beneficial from the viewpoint of an individual company - can jeopardize the system's integrity and function.

Read Full Article