Dealing with Supply Chain Challenges in 2023
The supply chain landscape is constantly evolving, and it requires adaptive strategies to navigate the challenges that arise. Supply chain managers today face a multitude of obstacles, including the use of outdated technologies, global disruptions, and shifting customer demands.
We dived into this topic at the webinar “Dealing with Supply Chain Challenges in 2023”, held by Streamline Products experts Amy Danvers and Lu Shi along with our valued partners in the Philippines John Boe, Senior Director at Genie Technologies and Philip Hall, Consulting Director at Genie Technolgies. Both John and Philip have over 30 years of experience in supply chain management and operations.
The common supply chain challenges are as follow:
Each of them will be uncovered in more detail.
Highly Variable Market Conditions
In today’s highly variable market conditions, several common trends have emerged. These include a decrease in disposable income, reduced working hours, increased fuel and energy bills, and higher prices for most commodities. As a result, households are finding it increasingly challenging to make their salaries stretch further. Even as businesses return to normalcy after the COVID-19 pandemic, it is unlikely that this trend will improve in the near future.
In response to the highly variable market conditions, businesses can adopt a digital approach to Supply Chain planning. By leveraging AI capabilities, companies can effectively manage the fluctuations in the market. Implementing an efficient sales and operations planning (S&OP) process that involves all layers of the organization in supply chain planning can provide valuable insights and ensure alignment. Additionally, utilizing dynamic simulation tools can help prepare for unpredictability and enable the creation of a stress-resistant plan. This digital approach empowers businesses to navigate the challenges posed by variable market conditions with agility and resilience.
Inefficient approaches for the supply chain can have detrimental effects on business operations. Here are some common trends that contribute to inefficiencies: Over-ambitious Expansion Plans, Post-COVID Strategies Going Wrong, Lack of Sustainable Approach for Supply Chain Crises. This results in inefficient stock for new branches and supplier inability to deliver the good on time.
A reliable simulation approach can help in developing a practical expansion plan:
- 1. Define a typical store profile and determine the product mix for the new location.
- 2. Replicate the sales history of a similar profile to forecast demand accurately.
- 3. Include opening promotions such as special items, discounts, and bundled offers to attract customers.
- 4. If expanding to a new area, consider establishing a new warehouse or distribution center (DC) to support operations.
- 5. Establish strong relationships between the warehouses and stores to ensure efficient inventory management and distribution.
- 6. Develop a replenishment plan that outlines how inventory will be restocked and managed across the expanding network.
As businesses continue to recognize the limitations of using Excel as their primary planning tool, they are embracing new trends that offer more sophisticated, efficient, and integrated planning solutions.
“A dedicated demand planning solution overall shows better results, compared to the ERP modules, provides easy integration for consistent results and Supply Chain specific features that will allow you to build the most consistent plan for the future,” – said John Boe, Senior Director at Genie Technologies.
Getting money back from your supply chain
To ensure efficient financial management and optimize revenue in your supply chain, here are some strategies to consider:
- 1. Monitor Key Performance Indicators (KPIs): Regularly monitor and review key metrics such as average days stock, net inventory value, stock-outs, and overstock. This helps identify areas for improvement and make data-driven decisions.
- 2. Readjust the strategy based on performance: Continuously evaluate the effectiveness of your supply chain strategy and make necessary adjustments to improve outcomes. This could involve optimizing inventory levels, refining demand forecasting methods, or streamlining logistics processes.
- 3. Share strategy indicators with suppliers: Collaborate with your suppliers by sharing relevant supply chain performance indicators. This promotes transparency and enables them to align their planning and production processes accordingly, leading to improved efficiency and responsiveness.
- 4. Develop a stable periodic replenishment plan: Take into account logistics limitations such as lead times, transportation capacity, and warehouse space when creating a replenishment plan. By balancing supply and demand more effectively, you can minimize disruptions and maintain optimal inventory levels.
By implementing these strategies, businesses can enhance their financial performance, reduce inventory-related costs, and create a more responsive and adaptable supply chain ecosystem.
The bottom line:
“Supply chain challenges are a common occurrence, but their impact can vary for each business. It is essential to focus on what aligns with your specific needs and leverage an automated process that enables strategic decision-making.”, – said Philip Hall, Cosnulting Director at Genie Technologies. “Streamline platform offers customization options in various areas, allowing businesses to tailor it to their unique business models and industry conditions. Consider what works best for you, how you can enhance predictability, and how Streamline can bring value to your operations.”
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- Up to 99% forecast accuracy.
- Up to 98% reduction in stockouts.
- Up to 50% reduction in excess inventory.
- 1-5 percentage points margin improvement.
- Up to 56X ROI in one year. 100% ROI in the first 3 months.
- Up to 90% reduction in time spent on forecasting, planning, and ordering.