Supply chain management
As we move towards the end of the pandemic and a surge in business, Geoff Wilson provides a post for leaders to help navigate the next economic journey.
We are in a world of opportunity and hurt. Demand is high, spirits (and prices) are up, and supply is constrained. What’s a leader to do?
When I was a young man I learned microeconomics on the back of a simple diagram with two lines…one for demand (always downward sloping) and one for supply (this one goes up).
Turns out, the microeconomists were right. Mostly.
We are living in a fever dream at the moment. It comes with the pleasure fog of rising demand for…well…everything as people regain the confidence that they can interact and transact with one another without threatening lives. It also comes with the tormenting nightmare of not being able to hire, source, or build the products and services that they need.
There’s plenty of blame to go around. The most plausible explanation is that we are simply mired in the midst of a massive supply chain bullwhip that is synchronized around the world for once. As positive and negative information trickles out across industry chains, individuals firms attempt to adjust…and they do so badly.
Add the labor-market distortions brought by extended unemployment benefits, extended school and family support organization closures, fear of the unknowns around coronavirus reoccurrence, and general inflation; and you have a multi-faceted political and commercial game that would make George R. R. Martin blush.
But all of this is couched, at least for the moment, within a massive environment of opportunity. Demand is popping for most of the economy, and poised to pop for much of the rest.
So (as I’m often wont to ask), what’s a leader to do?
Here are a few ideas.
Key points include:
- Prioritizing the opportunity
- Time to innovate
- Explore new supply chain structures and mechanisms
Read the full article, Revenge of the Microeconomist in the Real World, on WilsonGrowthPartners.com.
Balaji Padmanabhan shares an article that explains why executives must rethink the goal of cost reduction in supply chain operations to maintain a competitive advantage.
With repeated disruptions impacting business in recent years—from the financial crisis to severe weather to Covid-19—ensuring continuity of supply has become a top priority for CEOs and Boards. A survey of S&P 500 annual reports shows Supply Chain capability is a growing concern, with new initiatives underway to boost resilience, efficiency and flexibility. Excellence in Supply Chain operations is fast emerging as a major differentiator and a key to competitive advantage across industries.
Historically, most organizations have viewed Supply Chain operations as a “Cost Center” and focused on cost reduction and efficiency gains. For Supply Chain operations to achieve a competitive advantage, executives need to expand their thinking to integrate objectives along the following dimensions:
Managing Complexity – Globalization and the drive to cut costs at each step have created ever-more convoluted paths that, while seemingly cheaper, ingrain complexity and boost vulnerability. Tackling complexity starts with an understanding of the mid- to long-term demand/supply balance, the geographic distribution of customers, product value density, inventory positioning, and supply risk profile. Further upstream, organizations need to take a hard look at the impact of “SKU proliferation” and the net benefit of providing seemingly infinite choice to customers.
Key points include:
- Value-Adding Digitization
- Integrated Planning and Operations
- End-to-End Execution
Read the full article, Supply Chain Operations as an Enabler to Delivering Business Strategy, on LinkedIn.
Mohannad Gomaa shares an article designed to help you manage supply chain resilience by developing a continuity guide.
Supply Chain Continuity Plan (SCCP)
Manage your Supply chain resilience and provide the business with a supply chain business continuity plan Business Impact Analysis
External Suppliers and Customers:
Send questionnaires to your suppliers and service providers to see how their operations are adjusting and discuss capacity availability/pricing/contract FM. Conduct meetings on key risk orders/SKUs
Communicate with your customers on key issues and ways to collaborate to fulfill orders and (investment/capacity) support needed. There are lessons learned from Toyota and others on how their supply chain network worked together during suppliers’ emergency shutdowns
Leverage your IBP structure to schedule an emergency meeting and discuss demand and supply risks and impact on customers.
Identify what if scenarios and resolutions to be escalated to C-level
Key points in this article include:
- Recovery Strategies
- Plan Deployment
- Test Procedures
Access the full PDF, Supply Chain Continuity Plan Guide,from mgostrategy.com.
With a look ahead to a post pandemic environment, James Black provides nine questions to help you identify the potential possibilities and pitfalls.
While all eyes are on navigating the pandemic—and for retailers than also means navigating the critical holiday shopping period—smart manufacturers and retailers are starting to look ahead to envision how they will operate in a Post-Covid world. (This is not to say we are in a Post-Covid environment yet, rather, for how to strategically plan for when we are.) I offer up 9 questions as thought-starters to help you start thinking about the Post-Covid world.
Purpose – Will companies come out of the pandemic with a renewed sense of purpose (for the company and their employees)? Recent McKinsey research show that employees that are “living their purpose” at work report higher levels of well-being.
Opportunity – Given the short-term focus that has (rightly) dominated a lot of managerial thinking, it is critical for managers to seize the opportunity to anticipate what consumers needs will be. How can businesses get ahead of the competition more long-term?
Supply Chain – Robust supply chains were a key enable of winning as the pandemic settled in. How can companies’ leverage this unprecedented opportunity to design more agile supply chains to be more responsive to new demand flows?
Remaining topic question include:
Read the full article, 9 Questions to Help You Start Preparing for a Post-Covid Environment, on LinkedIn.
In this detailed article, Surbhee Grover identifies the decision-making inputs and new market approaches that will be required to survive in the new economy.
For entrepreneurs, coming out of COVID-19 isn’t the end of a crisis. It’s the beginning of a new way of thinking about their approach to product-market fit, financing, marketing and go-to-market strategies. And for some, will be a time to reflect on their personal approach to risk. The exponential pace of change to society will mean that only those entrepreneurs who have the greatest ability to adapt will survive.
Framing how the world will be different is important, as these differences will both unlock new opportunity and create new goalposts for innovation, user adoption (B2C and B2B), team building, product-market fit, and venture funding. We believe a few things will be true:
Areas covered in this article include:
- Brand relationships
- Purchasing behaviour
- Migration of talent and teams
- Re-imagined supply chains
- Data needs and sources
Read the full article, Shakeout of the Entrepreneurial Ecosystem What will it take to survive? And thrive?, on LinkedIn.
Tobias Baer explains why the second-order effects of the disruption caused by the Coronavirus are what should concern risk managers the most.
For risk managers, Covid-19 is both scary and a real-life test of our approach to risk management. As we are grappling with the virus and its fall-out, there are three sets of issues: the threat of the virus itself; the panic that it has caused; and lessons for operational risk management.
The risk of the virus itself is still hazy. I myself haven’t lost my cool yet considering facts such as that the total number of deaths from Covid-19 (less than 5,000 people globally as I write this) is dwarfed by the number of people who die in car accidents every year (more than 1 million in the US alone) and that while Covid-19’s overall mortality rate is estimated at 2%, it is less for the strong and healthy. In fact, as the WSJ points out, while Covid-19’s mortality rate of 2% seems to be 12.5 times higher than the ordinary flu with a mortality rate of 0.16%, the 2% may be greatly overestimated if many benign Covid-19 infections have gone undetected.
Points covered in this article include:
- Supply chain shortages
- Operational risk mitigation
- Mandatory equity buffers
Read the full article, Covid-19 and Risk Management, on LinkedIn.
Shane Heywood provides an article that reveals how beer manufacturers are collaborating with smallholder farms to get a more secure supply chain, lower the cost of raw materials, and empower more households with income, and all in addition to improving yields from farming that could change lives for the 2 Bn+ smallholder farmers in the world.
While interacting with 20+ smallholder farmers in Kenya, I, in addition to charities like One Acre Fund, had the chance to see first hand how improved yields from farming could change lives for the 2 Bn+ smallholder farmers in the world.
Yet, it’s not only NGOs / charities that recognize the value of farmers; beer manufacturers also work to collaborate with smallholder farmers. By incorporating the outputs from farmers as raw material, firms can get a more secure supply chain, lower the cost of raw materials, while empowering households with income.
Read the full article, Beer and Farmers in Sub-Saharan Africa: What’s next?, on Shane’s website.