Supply chains are in flux, and planners will need to deal with continuing challenges in the near future, says David Food, head of supply chain marketing at Board International.
Supply chains have had serious disruptions and challenges in the last couple of years, Food says, and that isn’t going away any time soon. As he sees it, part of the future uncertainty the supply chain faces stems from new levels of demand and supply causing “almost a house of cards effect.”
Alternately, he refers to some of the disruption as black swan events, necessitating supply chain managers to have to “replant” and consider how to respond. More localized supply chains may have slightly easier paths, but globalized supply chains see ripple effects across industries and production processes. “We can manage quite a bit of that,” Food says, “but many times there needs to be some readjustment, some reconfiguration.”
Execution is important, obviously, but Food says you must have a plan in place first. “If it's something that's coming from Southeast Asia into Europe, requiring seven, eight or nine weeks of lead time, that needs planning, that needs preparation. And then you need to be able to adjust that plan, to be able to fine-tune the capabilities, to ensure you’re supplying the customers with what they need, while still remaining profitable and still being able to execute throughout the supply chain.”
Planners are thinking about alternative scenarios today, he says. They are considering whether they can mitigate triggers that cause disruptions. They also are thinking of putting buffers in their planning process.
“It might be buffers of time, it might be buffers of capacity, buffers of inventory or even of finance,” Food says. “But they put those buffers in to give them the ability to flex, to be able to respond.”
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