3 Supply Chain Fundamentals to Help Manage Uncertainty
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Mary Vasile: Welcome to 3 Minutes in the Loop, the bite-sized video series where you can stock up on the latest supply chain insights, strategies and news in the time it takes to get your caffeine fix. I’m your host, Mary Vasile. Today’s topic is 3 Supply Chain Fundamentals to Help Manage Uncertainty. Our special guest is George Fowler, Chief Technology Officer and Senior Vice President of Planning and Omni Channel at Spinnaker. George, welcome to 3 Minutes in the Loop.
George Fowler: Glad to be here, Mary.
Mary Vasile: Now, the list of supply chain challenges seems to be growing exponentially. Explain to our viewers why supply chain fundamentals are so important in mitigating risk and managing uncertainty.
- Mary, the first fundamental is to understand the structure of your wider supply chain. While it’s easy to focus on immediate suppliers and customers, ignoring the end-to-end supply chain, including supplier’s suppliers and customer’s customers, leaves companies open to a variety of risks.
- During the pandemic, companies that had taken steps to understand their end-to-end supply chain were able to quickly digest regional and local data on COVID-19 and understand how this information would impact their supply and demand. Companies without this knowledge were unable to efficiently respond to shocks to their supply chains.
Mary Vasile: Thanks for that explanation. It’s certainly more crucial than ever for supply chain professionals to assess the potential weak points in their extended supply chain.
George Fowler: That’s exactly right. That’s a good lead-in to the second key supply chain fundamental: revisiting your supply chain design to mitigate risk and enable flexibility.
Two of the risks we see most often when companies evaluate their supply chains are:
- purchased parts that are single sourced from suppliers who themselves have only one source of manufacturing or supply.
- And production and assembly operations that are single sourced and located in areas where disruptions can occur.
Purchasing single sourced products from suppliers who do not have resiliency strategies in place is an obvious risk but can easily occur especially in industries where product designs rely on specific components.
Mary Vasile: Tell us how all of this affects supply and demand?
George Fowler: Well, developing demand and supply strategies to respond to disruption is the third supply chain fundamental practitioners should pay attention to.
In the face of supply chain uncertainty, scenario analysis such as S&OP and demand/supply planning systems provide an incredibly powerful tool for understanding issues and developing strategies.
And in terms of demand shaping, it is a powerful tool for responding to disruptions.
Consumer product shortages received significant media coverage during the pandemic, but the ability of some consumer product companies and retailers to pivot and ensure supply even when the portfolio was limited was remarkable.
Mary Vasile: Thank you for those key insights, George. You heard it here, three critical supply chain fundamentals for managing risk and uncertainty.
Mary Vasile: Thank you, George, for joining us today.
George Fowler: Thank you for having me.
Mary Vasile: And thank you for watching. Now you’re in the loop. See you next time.