June 15, 2017

Great Expectations: Supply Chain Flexibility

There is no Universal Template to Achieving Flexibility or a Finish Line

There isn’t a CXO out there who doesn’t have great expectations for their company. Record profits, satisfied customers, and sustainable growth are the lynchpins to success. However, the world is a complicated place, with 196 countries, almost 7,000 languages, and 7.5 billion people – with varying expectations from retailers and manufacturers. World leaders and regimes are in flux, with regulations, trade agreements, and enforcement actions constantly changing to accommodate this complex and growing world. For companies doing business on a global scale, the depth and breadth of knowledge required to stay profitable amidst the commotion continues to grow. One of the best ways to compete globally is to transform your entire supply chain through flexibility. Only a truly agile company can weather the complex and changing environment that exists today.

Barraco Says... Each company has unique needs and must manage their supply chains and solutions in the way that best fits their operations. What do you say? Click here to send us your comments

Disruption is the rule, not the exception

While major disruptions to commerce such as environmental catastrophes, geo-political conflicts, port closures, and financial crisis are not going to happen every day, no global business can ignore the possibility of the next big showstopper. Truly agile companies with operational efficiency can mitigate the risk of major disruptions by employing techniques to make quick changes in response to even the worst situations. Companies who can remain nimble will weather almost any big storm with relative ease, and position themselves to come out ahead when calm is reestablished.

But disruption doesn’t only happen through massive global events. Shifts in consumer demand, regulatory or tax changes, and even increased competition are all disruptions that can upset a static operation. Slightly larger disruptions, such as factory fires, labor issues, or environmental bombshells can be avoided through visibility. Identifying new partners on the fly if an issue does arise is the kind of agility that will help keep a brand afloat. True flexibility is a must to adjust to minute deviations from the status quo, to capture new market opportunities or increased demand the moment it is detected, or quickly shift sourcing to new regions to capture preferential trade, lower labor costs or raw material availability. Companies with flexibility incorporated into their supply chains will have a competitive advantage that allows them to meet high expectations for improving margins and growth.

Bending the right way

With unpredictability in consumer spending and market fluctuations, the best reaction is the one that happens fast, with instant knowledge guiding the important decision-making on the fly. This is only accomplished through end-to-end visibility, the glass pipeline that displays the entire supply chain from start to finish with clarity and speed. Global companies that want to turn on a dime when needed must have full visibility into every part of their operations, so that quick changes serve to drive down operational costs, lower risk, and raise the bar for innovation. Risk mitigation and cost savings can be achieved through flexibility by reacting with speed when required. Changes to restricted party lists are captured instantly, detention and demurrage fees avoided by careful planning, and compliance risks mitigated through proper documentation and certification.

Quick reactions without full knowledge of all operations can be disastrous. Over- and under-compensating for disruptions can be costly, if you don’t have all of the information needed to make the best and quickest decision. Global Trade Management (GTM) software affords the opportunity to capture, store, and analyze every part of the supply chain through digitization. GTM platforms provide a place to identify and share product, location, and event-based information in real time. Accurate costs are available instantaneously, allowing for quick decisions to cut costs and make adjustments as needed.

Achieving flexibility

Global commerce, by its very nature, is a risky endeavor. However, a centralized, digitized, and cross-functional GTM platform can provide the flexibility to react quickly to both micro and macro events and trends. A truly flexible operation can:

• Track Work-in-Progress
• Postpone order decisions by phasing in the POs (commitment, style, shipment)
• Provide advanced notification of shipments at the carton level detail via shipment preparation at the supplier level
• Track inventory in-transit
• Provide proactive alerts to supply chain issues, for fast reaction to disruptions
• Facilitate real-time communication
• Automate document creation and processes
• Achieve better predictability for a leaner, quicker operation.

There is no universal template to achieving flexibility, or a finish line that means the work is done. Each company has unique needs and must manage their supply chains and solutions in the way that best fits their operations. Understanding your strategy in the global marketplace is key, so that you can best customize the GTM solution to your situation. And as changes occur and disruptions commence, your company will remain agile by staying informed instantly and having the visibility needed to make fast adjustments.

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