There are five major factors which influence supply chain operations – cost, risk, speed, innovation, and agility. It is easy to comprehend how innovation, cost, risk and speed impact the bottom line. But when does agility become a competitive advantage for a profitable, smooth sailing supply chain?
Read the headlines any day of the week – the current business environment is characterized by uncertainty and constant change. This means organizations need to quickly adjust tactics and operations within its supply chain in response to many of the potential influences.
Barraco Says... |
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| As companies need to respond to the multiple scenarios like shorter seasons, in-season refinements and regionalized inventories, optimal sourcing models will need to change and evolve constantly. Thus, agility has a bigger place in the sourcing equation. |
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Consider these situations where dexterity is a necessary element of a global supply chain:
- Major supply chain disruptions: these are typically high-impact, low-likelihood occurrences that are usually not on your everyday radar; circumstances like extreme weather, geo-political issues, and port closures can be lessened with a nimble operation.
- Slow sales or consumer demand shifts: 2016 retail statistics have been all over the charts – import and export volumes down, inventory levels high, sluggish store traffic, e-commerce sales setting trends. Simply reducing purchase orders isn’t a quick enough method of slowing down your supply pipeline.
- Increased demand leading to shorter product lifecycles: Conversely, a spike in demand can’t be detected in advance, and requires the ability to speed up production or lose on the opportunity; this can be the result of catastrophic events (e.g. cold weather strikes a region and warm gear is needed or a flood hits and construction material is selling out) or something as simple as a social media buzz caused by a celebrity wearing your brand on the red carpet.
- Competitive advantage to shift sourcing to new regions: preferential trade, lower labor costs, or raw material availability leads to supplier diversification and optimization strategies.
Flexibility is hindered by a lack of visibility into every party in the supply chain—manufacturers, suppliers, brand owners, retailers, shippers, and everyone supporting them. Adopting technology and processes to enhance visibility helps create a nimble supply chain, expanding a company's capabilities to meet the needs of today's any-channel consumer, and adapt to a rapidly changing business environment.
Sourcing and global trade management software provides a common platform to identify, capture, and share product, location, and event-based information in real-time. This consolidated view enables true supply chain visibility, a valuable asset to ensure the flow of goods.
As companies need to respond to the multiple scenarios like shorter seasons, in-season refinements and regionalized inventories, optimal sourcing models will need to change and evolve constantly. Thus, agility has a bigger place in the sourcing equation. Companies that will win in the future will have to focus on building a sourcing model that can “turn on a dime” to drive lower cost, reduced risk, competitive innovation, high quality, and incredible speed.
To discover more about the benefits Amber Road can bring to your global trade program, please visit www.AmberRoad.com.
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