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Preparing your Supply Chain for the New Age

Let us begin by understanding that the only thing that is known with certainty is that there will be a global and local uncertainty of multiple variables that will impact our businesses. Of course, each organization experiences specific circumstances and delving into each of its variables would be like putting a very long list as a task. However, the huge questions are:

When and how will demand be restored?

What resources will be available, when and at what cost?

And consequently, how can we prepare our business?

According to a Harvard Business Review article (Carsgtem Lund and Thomas Ritter), the actions of each company will be defined by the analysis of each of the following five topics that are understood around 5 P’s:

  1. Position: Analyzing the organization in the market and its supply chain
  2. Perspective: Deciding how the organization will operate
  3. Projects: Defining to study, execute and coordinate
  4. Plan: Based on assumptions and changing variables
  5. Preparation: Planning and execute

 

Organizations will then need to define what their position will be in the market, considering the offer of products that will remain; how it will compete and the strategies it will carry out, considering the capabilities it has or will have in the future and, which management technologies will support for decision-making and execution.

The restoration of market and supply forces will be gradual and geographic. This involves defining assumptions of expected dates and available capacities that will be gradually (or not) being incorporated, which will require two main strategies: quickly determine the assumptions over time and assess the risks to make cost decisions – benefit.

It has been commented that there will be no return to normality, that we will enter a new way of doing business, and that there will foreseeably be changes in:

  • The internal work culture
  • Internal collaboration and with business partners
  • Redefinition of trust agreements

The pandemic caught many organizations unprepared to work from home, and in many cases the maturity of their planning and implementation processes will determine their resilience.

Today organizations face a list of initiatives and each one must be analyzed in depth in order to gather enough information to determine priorities according to:

  • The analytical strengths of each organization
  • Resources: Working capital, physical capacities
  • Cost-benefit
  • Risks
  • opportunity

Each process in the supply chain will be subject to careful planning and its degree of maturity will determine its survival capabilities.

It is possible that some organizations know their limitations to face one and the other projects, but all can start to prepare according to their position, perspective and projects, with two specific actions:

  • Understanding the capabilities that the organization will require
  • Analyzing business processes and information technologies

For both tips at Cerca Technology we make ourselves available, bearing in mind that we offer solutions to simulate and optimize your supply chain model, allowing you to have your digital twin to quickly and accurately define possible scenarios and support decision-making, as many times as the situation in your supply chain changes.

Models allow you to develop optimal, feasible plans with analysis of demand, distribution, transportation, manufacturing, and purchasing decisions. In addition, they give visibility over time, considering randomness, assumed changes in the variables and interventions in the assumptions. Optimization scenarios allow you to comprehensively determine, with the required level of detail, specific action plans that maximize and / or minimize key indicators.

We know that these are challenging times in many ways, but we are convinced that with a conscious planning process and an understanding of technological solutions as enhancers and facilitators, we will be able to transform our organizations so that they have an interesting panorama in this new era.