Are We Planning To Fail? Supply Chain Woes
The Supply Chain Industry was in the throes of multiple disruptions, with the lock downs forced on us by the pandemic, and the resultant steep variations in demand for goods.
Most of the players in the supply chain domain were not ready for this disruption; the evidence was, and is, all around us. Sharp variations in demand for goods, resulted in:
- closure of manufacturing facilities
- rising cost of goods
- drop in availability of surface transport infrastructure
- drop in availability of skilled workers – truck operators and factory workers
- shipped goods, both consumer and parts meant for further manufacture and assembly, stuck aboard ships, for lack of adequate port infrastructure
- Demand forecasts gone awry
- Production schedules not adhered to
- Orders not delivered
- Rising costs and revenue loss
- Customers left disappointed
Although there were abstract predictions about a virus that could cause a pandemic, by wise men, most companies did not perceive the predictions as serious. They did not expect that these disruptions could snow-ball into a major supply chain catastrophe. Complacency set in – the that-can’t-happen-to-me syndrome was voiced.
But the supply chain bull-whip effect caught us unprepared. Variations in demand at the retail end of the supply chain, were accentuated and traveled up the chain towards the manufacturing end.
Most companies failed to plan. They imagined that they could easily pull through, and be back to normal in no time.
What practices can be adopt to mitigate the bull-whip effect:
- Diligently forecast demand
- Take into account lead times – time from order placement to delivery – while ordering
- Order less and more frequently – create a predictable routine
- Desist from conducting discount sales often
- Maintain prices – do not offer discounts on price. This too creates variation in demand
The fundamental cause for the supply chain bull-whip effect is the lack of communication and flow of information.
Here’s what we can do to make the supply chain “future-proof”:
- Plan – the activity that starts with analysis of the supply chain and proposing an appropriate system to plug the leaks, and lower stress in all the stakeholders along the chain
- Increase visibility – gather all available data and provide information and insights to decision makers
- Connect the silos. Establish real-time communications, including configurable alerts, among the various players in the supply chain, end to end
Here’s where InnoBoon Technologies comes in to provide a one-stop supply chain planning and management solution – the Supply Chain Control Tower, along with prior consulting.
- End-to-end visibility of the entire supply chain
- A one-of-a-kind communications module that lets stakeholders and operators communicate in real time. Faster decisions contribute to dampening any rising bull-whip effect
- Clear, uncluttered, intuitive user interface that is easy to learn
- Initial consulting by experts provide optimum solution
- Support through the lifetime via easy maintenance contracts
Get in touch.