Supply chain woes have been a consistent source of frustration for retailers due to a lack of investment, which the pandemic and ongoing global conflicts have exacerbated, Dr Deborah Pike, Anaplan’s Principal Supply Chain Solutions Consultant, writes.
Consumer behaviour has significantly shifted since last year’s shopping season, with consumers spending more for Christmas gifts, despite inflation and increased living costs.
While enhanced sales bode well for retailers, they continue to be hampered by supply chain disruptions and the challenges of meeting demand. This has been a consistent pain point for retailers due to the lack of investment in supply chain solutions and exaggerated by the pandemic and ongoing global conflicts.
While we are seeing small improvements in this space, Gartner predicts that supply chains will be disrupted until about 2024, and we have also seen some indicators of that situation, such as the ongoing skill shortage and soaring fuel costs.
As such, it is crucial for businesses to be strategic when it comes to supply chain planning in 2023 and beyond.
Remove siloes for better business planning
Research has seen a 46.7 per cent increase in Australians shopping online and a 12 per cent decrease in brick-and-mortar shopping in Q1 of 2022 compared to the same period in 2020.
Considering these changes, organisations should invest in operational solutions such as connected planning —a robust solution connecting different streams of the business across a single platform. While we have seen some organisations investing in the connected planning approach to running their business, 87 per cent do not have a structured sales and operations planning process. This means that different parts of the business, which are critical to its success, are not aligned or necessarily aware of their role in the wider business.
For instance, if a company’s sales department is siloed from its finance team, there could be a misalignment between customer demand and revenue expectations. If sales and marketing are siloed from the operations team, they could end up pushing products that cannot be delivered due to supply chain issues.
These misalignments can be easily solved if all departments have complete visibility into what the others are doing within the business – which can be achieved through the connected planning solution.
Use ‘what-if’ scenarios instead of historical spreadsheets
Organisations have traditionally looked backwards and used historical data for forecasting. We can all probably agree that if we use data from March 2020 through to June 2020, organisations will be painting an inaccurate picture of demand.
Planning is no longer ‘set it and forget it’ – historical data may not be giving us the full story, and business leaders must be prepared to access other data sources; exclude periods of history; identity and action outliers as well as have the ability to pivot as market indicators change – that is, plan for “what-if” scenarios.
Using simple spreadsheets may also lead to instances of human error and cannot be relied on as the sole source of truth. Instead, alternatives such as connected planning solutions provide reliable, real-time data allowing businesses to make informed decisions and rapidly pivot their strategy.
Prioritise sustainability in your supply chains
We have seen what natural and health disasters have done to supply chains over the last few years. Coupled with increased consumer support for businesses with a sustainability ethos, companies must embed sustainability in their supply chains.
Key considerations include how to source materials that are in line with the wider environment, social and governance metrics, how to work with suppliers to make sure products can be sustainably produced and recycled, how to measure manufacturing or logistics emissions to ensure that they are driving toward overall commitments and how to partner with organisations with aligned responsible and ethical objectives and practices.
Even with all these tips in mind, ultimately, agility is essential. Organisations need to be able to adapt quickly to changes in the market to shape supply chains in line with global developments.
Therefore, our objective has always been to help organisations move away from siloed approaches. By bringing different stakeholders together, companies will be better equipped to plan sustainable supply chains more effectively for the ultimate benefit of the business and all concerned.
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