Supply Chain and S&OP Challenges in 2024

The panel discussion “Supply Chain and S&OP Challenges in 2024” discoursed illuminated key trends, challenges, and strategies shaping the supply chain. Featuring expert speakers David Howatson, Enterprise Account Executive at Streamline, Paul Linden, with over 30 years of experience as a Supply Chain & Operations Executive and Rory O’Driscoll, a Business Planner at NURA USA the discussion provided valuable perspectives on AI integration, strategic procurement strategies, and optimizing S&OP processes for operational excellence.

Navigating the AI Landscape

AI is starting to change supply chain management. Gartner predicts a $5 trillion economic benefit from AI, showing how important it is to act now. Companies need to get ahead of the competition and move past the hype to find AI’s lasting real world value in a fast-paced, always changing world.

To empower AI, organizations need to be bold and practical. As companies move toward AI maturity, they must seize opportunities, set realistic expectations, and foster a culture of learning and adaptation. By doing this, businesses can use AI to improve operations and stay competitive.

“People tend to exaggerate, or they reach this peak of inflated expectations, and then we have a disillusionment. We will also experience that in the supply chain,” – said Paul Linden, a Supply Chain & Operations Executive. “People tend to overestimate the benefit of these types of technologies in the short term, but they tend to underestimate the benefits of technologies in the long term, and so I think that all of our teams need to start to scale up in terms of their knowledge, their use and their piloting activities with AI this year.”

Data Quality

The discussion shifted to the problems companies have getting useful information from a massive amount of supply chain data. They pointed out issues like data accuracy, validity, system integration, and data security. Paul Linden and Rory O’Driscoll emphasized the need to prioritize data quality, train systems with human intelligence, and turn big data into important insights.

AI and big data are becoming more common in supply chain management. As it is quite important to train teams, organizations should offer training programs and certifications. They should also encourage data-driven decision-making.

“We need to foster a culture of data-driven decision-making. Often, decisions are made impulsively or based on intuition, but as data becomes increasingly available, it’s crucial that we have the skills to extract meaningful insights from the vast array of data sources we have access to,” – a Supply Chain & Operations Executive. We should prioritize a culture emphasizing the importance of relying on data to address root causes rather than relying solely on our gut. Investing in people and providing training in data analysis is essential.”

Enhancing Visibility and Traceability

Companies need to improve visibility and traceability in supply chains. This helps them run better and meet customer needs. Location intelligence is important for this as the companies are using different technologies and strategies to improve how they track products in the supply chain. One important technology is the Internet of Things (IoT). It includes sensors and RFID tags that track products’ location and condition. These devices help companies get real-time information, find problems, and work more efficiently.

“Having visibility into current inventory levels and future needs guides decisions on import timelines, warehouse storage, and shipping schedules. While big data and logistics are intertwined, it’s crucial not to drown in excessive data,” –said Rory O’Driscoll, a Business Planner at NURA USA. “Focusing on distilling data to the essential information needed for logistics operations is paramount. Without this focus, the complexity of managing numerous variables can hinder rather than help logistics teams.”

Geopolitical risks

The panel addressed geopolitical risks affecting supply chain operations, emphasizing proactive measures such as diversifying supply sources, strengthening supplier relationships, and employing supply chain risk management tools. It is important to monitor the global landscape, anticipate potential risks, and collaborate with suppliers to develop joint contingency plans.

“There are things like trade tensions and tariffs. There is political instability and conflicts going on in the world. There are threats to shipping lanes. As supply chain practitioners, we need to monitor the landscape continuously,”- said Paul Linden, a Supply Chain & Operations Executive. “We have to think ahead of potential risks caused by geopolitics. You can address it proactively by diversifying your supply courses. If possible. Over-reliance on any single supplier or single country is proven to be risky.”

Economic Challenges and Inflation

In terms of addressing economic challenges like inflation, the speakers discussed strategies such as renegotiating contracts, diversifying sourcing, hedging against currency risks, and investing in energy efficiency. Paul Linden and Rory O’Driscoll underscored the significance of transparency in communicating cost increases to customers and maintaining redundancy in supply chains to facilitate seamless pivots when necessary.

“Rather than vague explanations like ‘prices are rising due to inflation’, providing a clear breakdown of the specific factors contributing to the cost increase is crucial. Is it driven by material costs, shipping expenses, processing fees, or labor? Having this clarity significantly facilitates difficult conversations with customers,” – Rory O’Driscoll, a Business Planner at NURA USA. “While no one enjoys delivering unwelcome news of price hikes, transparency makes the process smoother. Openly communicating the reasons behind the increase helps maintain trust and fosters stronger relationships with customers in the long run.”

Supply Chain Investments

Regarding supply chain investments, the panel advocated for a portfolio-based approach, prioritizing projects based on ROI, NPV, and strategic alignment. The most important is the need for investments in AI, flexible distribution networks, sustainability, talent development, and decision-making culture. Additionally, the speakers considered the direct impact of investments on people and processes to ensure efficiency gains and tangible benefits.

“There are a lot of things we can do in terms of the overall economic landscape. And again it comes back to prioritization, making sure you’re investing your time, your systems, and your dollars into the right strategies that make the biggest impact on your organization and your supply chain.” – said Paul Linden, a Supply Chain & Operations Executive.

The Bottom Line

Overall, the discussion underscored the critical importance of enhancing visibility and traceability within supply chains, mitigating geopolitical risks, addressing economic challenges like inflation, and making strategic investments to fortify supply chain resilience.

As organizations navigate these complexities, the imperative for leveraging AI-powered platforms for supply chain optimization becomes increasingly apparent. In this regard, GMDH Streamline emerges as a pioneering solution, offering cutting-edge capabilities to streamline operations, optimize efficiencies, and navigate the complexities of modern supply chain management with agility and precision.