Global supply chains are in a constant state of reshaping and adapting to changing needs — indeed, their very success depends on their ability to do so. Yet despite placing a heavy emphasis on planning and forecasting, many have neglected to pursue executional excellence as a means of combatting the disruptions caused by natural disasters, goods and labor shortages, and geopolitical conflicts.

As we’ve seen over the last few years, planning and forecasting alone haven’t been enough to deal with the delays and shortages rippling through global supply chains. Instead, companies have seen production delays, inventory shortages, and damage to business reputation and retail customer relationships.

The traditional role of supply chain planners is to minimize operational costs by matching production demand with capacity. There’s a problem, however, with this nearsighted focus on planning and forecasting. In an August, 2022 report by McKinsey & Co., 45% of respondents said they either had no visibility into their upstream supply chains, or that they could only see as far as their first-tier suppliers. Because manufacturers rely on complex, multi-tiered networks of suppliers, external manufacturers, packagers and logistics providers, even minor delays caused by this inability to see further upstream can escalate into major issues throughout the network. The lack of data connectivity, no matter how well one plans, means that a more collaborative approach is required, so that brand owners and their external supply chain partners can respond at real-time speed with agility and adaptability.

When it comes to modern-day supply chain management strategies, critical areas of value are being overlooked. Of greatest concern is a lack of data visibility and connectivity within supplier networks. Sources of risk include: 

• High inventory and late deliveries due to difficulty confirming forecasts and capacity plans with trading partners;
• Higher costs due to schedule changes and expedites;
• Lower order fill rates, stockouts and longer lead times, leading to decreased customer satisfaction;
• Missed savings opportunities due to inefficient manual processes and inconsistencies;
• Time-consuming, fragmented reporting processes, and
• Material waste due to obsolescence, negatively impacting sustainability metrics. 

Those looking to take on digital transformation initiatives need more than planning capabilities. The untapped value of network synchronization extends to all parties in the chain, including manufacturers, packagers, and material suppliers — not just the brand owner of the external supply chain. 

For their part, brand manufacturers have massive potential to optimize performance, according to a recent survey conducted by Supply Chain Insights. They stand to realize improvements in the visibility of manufacturing, suppliers, logistics and the extended enterprise. By redirecting attention from planning to execution, they can achieve dynamic, multi-enterprise collaboration.

Forward-thinking manufacturers and supply chains have begun to recognize the importance of investing in building data, automation, connectivity and intelligence within their supply chain networks. Indeed, the need to orchestrate and collaborate across supply ecosystems has never been greater. Research by Gartner predicts that by 2026, more than 50% of large organizations will compete as collaborative digital ecosystems rather than discrete firms, sharing inputs, assets and innovations.

According to a paper by Accenture, 72% of supply chain “masters” believe multi-enterprise supply chain capabilities “will be critical to enable their customer experience-led growth.” With a seamless flow of data and collaboration capabilities, enterprises can ensure real-time tracking of on-time, in-full (OTIF) fulfillment; accurate on-hand inventory visibility; timely production status updates; on-time product delivery, and compliance with requirements for quality, safety and traceability requirements.

The contract packaging market is estimated to grow at an annual rate of 6.5%, reaching $59 billion by 2030. The Contract Packaging Association further estimates that the sector’s manufacturing market will achieve annual growth rate of 11.6% from 2023 to 2028. For this reason, competition among service providers has never been more fierce. The ones that will be best positioned to capitalize on these opportunities will be those that invest in digital transformation to close the visibility gap, and infuse greater agility into their supply chain networks. The need has never been greater for these service providers to onboard digital tools to meet heightened business and customer requirements. 

Jason Tham is co-founder, chief executive officer and brand ambassador for Nulogy.