So what is the next disaster and how will it affect your supply chain? Who predicted the crisis with the economy? All of a sudden demand is disappearing and suppliers are going out of business. Will oil prices sky rocket again, impacting globalization, tourism and high consumption lifestyles? Will consumers pay a bit more to shop locally and ask supply chain professionals to question if it makes sense to manufacture in one part of the world for consumption in another?
Will there be natural disasters that impact supply regions, shipping lanes or transit times and costs? A news article from Canwest News Services reported that a more robust supply chain is required to secure a long term supply of medical isotopes thousands of people depend on everyday to diagnose and treat any number of ailments including cancer and heart disease all because of aging nuclear reactors used to produce the isotope. What supply chain challenges will pharmaceutical companies have given the fact that if their supply chains do not respond, lives are in jeopardy?
Many questions, tons of predictions and all of this is why my favorite oxymoron is forecast accuracy. What’s a company to do? Lay down and take your lumps? The good news is there are things to do and learn to position your supply chain for an unpredictable future. AMR just recently published their “Top 25 Supply Chains for 2009”. In this article are some valuable lessons and proof that you can be successful in the face of adversity.
The big lesson from this list of companies, or winners, is demand will change. They are betting there will be increases as the economy improves but whether demand is increasing or decreasing these winners tooled up to become masters at sensing and responding to shifting demand patterns. They also viewed supply chain collaboration as a competitive advantage, getting closer to customers and suppliers especially with the focus on demand driven design. The winners also exploited their core competency and looked for other opportunities to leverage that competency. The final similarity with these winners was they all had supply chain leadership that recognized complacency is recipe for disaster.
That brings us back to the first question, what is the next disaster? Doing nothing to prepare for the future would result in the next disaster. We all know there will be change, some of it may be catastrophic, hopefully the change will be increased demand, a problem we all would love to have. Either way, being prepared for the unexpected will separate the winners and survivors from those lost to an unpredictable future.
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Tags: Collaboration, Supply chain risk management
Posted in Supply chain collaboration, Supply chain risk management
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Excellent deduction. We might say that the companies now should execute a new process beyond plan: Preparation. Preparation process must analyze a set of possible risks and issues that can affect the supply chain in shortly, medium and large terms and define a lot of strategies and solutions to answer when these risks should appear. The people need other skills beyond demand planning, need to know very well the macroeconomic environment where his company operates.
A new process is the key: PREPARATION.
Thanks for the comment Manuel. I like your description of a “preparation process”. As soon as the unexpected occurs people will know what action to take.
I agree: complacency is a recipe for disaster. Fortunately, today’s automated supplier information and risk management systems make it possible for companies to streamline processes and engage in continuous design. All of which is just more reason that supply risk and performance management are becoming increasingly critical in today’s complex global supply chains, particularly given the uncertainty of current economic conditions.