While supply chain management wasn’t something many businesses openly discussed until quite recently, it took a global pandemic to awaken consumers and businesses alike as to just how important the supply chain is. Not only did consumers begin to feel the crunch when supply chains were interrupted, but businesses found it difficult to stay operational on several levels. If you could only say one thing that would explain the importance of supply chain management, try saying “Covid-19 stock shortages” to see how quickly the light of comprehension is illuminated.
It’s Bigger Than You Think
Even though supply chain management is a term (and practice) that has been around since the early 1990s, there has been a great deal of misunderstanding as to what is involved in the process. It’s more than just dealing with deliveries from point A to point B. The supply chain is bigger than finding ways to maintain adequate materials and stock to fill orders. It’s about anything and everything that involves suppliers, manufacturers, distributors, shippers, retailers and even consumers. It’s about a collaboration among all of the above.
Or, simply put, supply chain management refers to anything that would prevent products from being developed, manufactured, distributed and sold at cost and time effective levels for all parties involved. This far-reaching, multi-level approach to what constitutes supply chain process improvement as developed by Supply Velocity, to put it briefly, has a twofold goal. They seek to improve a company’s profitability while working to secure customer satisfaction and retention.
Key Elements of Supply Chain Management
So then, supply chain management might not have been able to totally prevent all the disruptions in the supply chain resulting from Covid-19, supply chain management may have had workarounds in place so that those disruptions would have been far fewer and much less costly. For example, one of the main elements of supply chain management deals with collaboration to plan and forecast market movement along with the replenishment as needed. This would entail such things as:
- New product development
- Sharing current inventory data
- Encouraging collaboration and assessing risk management
There were discussions among the few elements vital to ensuring a solid supply chain strategy involving artificial intelligence, which will serve as an instrument towards sustainability in the supply chain as a key differentiator. Even customers are involved to some extent in the planning and forecasting models, often through data analysis of current and forecast market movement but they are involved, nonetheless.
Learning from History
Even though there was no way to foretell the global pandemic that would all but call a halt to production and commerce for large portions of the world, we can learn from what we’ve experienced for the past two plus years. With what we have learned, businesses can now begin fine tuning supply chain management strategies which will at least mitigate some of the losses experienced during those early days of SARS-CoV-2. They can work toward a supply chain process improvement strategy with consultants who can help them identify areas of risk so as to be better prepared next time around.
Will there be a next time? Let’s hope not in this lifetime! But if there is, new strategies should get you through just fine.