Part 2 of "The New Supply Chain" blog series by Mike Loquercio, Manufacturing and Supply Chain Management Expert.
The first reaction to a severe supply chain disruption is “organized chaos” and then you attempt to rebalance and update all your purchasing, replenishment, planning, distribution, and warehouse parameters.
This past week, several folks in the Chicago network have reached out to gain access to pallets! Yes, pallets – they are now an “essential” resource and with some inventory not moving at all – you have stranded packaging and components.
Your internal supply chain might be working well – you have robust planning and replenishment processes, great relationships with vendors and customers, and a versatile sales and operations planning process that keeps you focused on key metrics and trends.
If you are not that lucky, it’s probably a day to day “redo” – will I get the necessary raw materials and supplies to meet my production plans and provide product to my customers? Demand patterns are changing daily – in the health care industry – hourly given the volume of new cases and patients.
By default, you might have just created Lean processes without all the standard work and implementation project plans!
You might have heard about Manufacturing 4.0 or Supply Chain 4.0 – the integration of technology to the customer experience to drive customer engagement and the use of “big data”. Unlocking efficiencies and capacity by creating or enhancing collaboration from machines to business systems to customers will be the new norm.
Customer expectations are growing: the online trend of the last years has led to increasing service expectations combined with a significant change in order sizes and total number of items. Depending upon your markets, you might see further individualization and customization. When speed to market becomes the competitive advantage, the supply chain of tomorrow has to be able to exceed that expectation.
The online-enabled transparency and easy access to a multitude of options regarding where to shop and what to buy drives the competition of supply chains. It’s not just the products, it’s the shared data and communications that will be part of the future solution. The future supply chain will need to capture more information and data and leverage integrated processes that use “optimization.”
You will need to be the following:
- More reliable
- More accurate
- More efficient
- More custom
When we do find the new norm, it’s time to reinvest in the supply chain and start building for the future. Remember – your competitors are moving in this direction and the consumer base will demand that type of service!
Read part 1 of the series: The New Supply Chain: Pandemic
About the author
Mike has spent over 30 years in the food and food packaging space working as an engineer, operations and multi-plant manager along with supply chain and logistics roles. He has worked with CPG companies - Walmart, Target, and Costco along with food service, grocery processor and distribution accounts. He also has extensive order to cash business systems implementation experience with SAP/JDA.
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