Forecasting has been a primary ingredient of supply chain management, especially within the consumer packaged goods industry, for several years now. However, basis the recent global crises surrounding the pandemic, there are occurrences that forecasting cannot even distantly prepare for. According to a recently-published report, “there is no one-size-fits-all approach for companies to follow, but instead, and guiding vision for how your business can operate.”
Nowadays, the Consumer Packaged Goods (CPG) companies continue to experience the same swings in customer buying behaviour, sudden pivots to new product delivery channels, and fluctuating capacities of the external supply chain partners. CPGs can no longer survive on forecasting only. Instead of relying on pre-mediated forecasting models, companies are now eyeing managing supply chain disruptions by agreeing with operational agility.
Data illustrates that companies that preaches and practices supply chain agility witness a greater customer service rankings when compared to their competition. Some brands hold inventory levels that rotate faster than less agile competitors.
What is Supply Chain Agility all about?
Supply chain agility refers to an organization’s capacity to effortlessly respond to market changes. These changes are vast and entwined, involving every aspect from changes in customer preferences, to economic and market volatility, and competitor disruption.
Supply chain agility isn’t the day-to-day operations and workflows adjustments to meet internal KPIs. Instead, it is the improvisation of manufacturing supply chain agility that will hasten the evolving internal processes. Predominantly, it means adopting new technology, data management, and service agreements with the immediate vendors. The goal is to keep up a responsive and informed supply chain that may seamlessly navigate any alterations, which will come, either positive or negative.
An agile supply chain is always designed to respond to the next interference or demand shift through digitally-enabled communication. So, how can a company engage in the digital transformation, required to solve agility?
Check-points to attain competitive agility over the supply chain
Some primary areas to focus on to minimize uncertainty and own a competitive supply chain are handpicked as mentioned below.
Awareness/Alertness: A situation-cognizant organization can forecast industry changes, upcoming disruptions, competitor threats, and occasions of growth. Therefore, awareness of changes in product demand, supplier trends, materials procurement, customer feedback, market pricing, etc. can be noteworthy
Accessibility: Companies cannot make modifications without access to tools and information. After an alert, the business would usually spot a pattern or a trend. They have access to the specific industry data in relevant historical logs that all the decision-makers can share and analyse
Decisiveness: If a corporation is decisive, it can swiftly translate any industry shift into action. The most decisive companies are those that have unified or simplified change-of-command to cut back the number of touchpoints
Swiftness: Swift organizations implement their faster action plans. The faster changes are made, the more cost-effective will be the entire supply chain, which will be more profitable
Flexibility and Adaptability: Agile organizations have the ability and also the buy-in to change the continuing processes when a new opportunity presents itself. This can be executed without stirring the business.
Steps to follow for a more agile supply chain
Step#1: Digitalisation for a supple external networking
In today’s unstable consumer market, further aggravates the existing complex and time-consuming drill of managing a network of external supply chain partners. The standard paradigm of managing multiple supplier tech platforms demands a new, technology-driven solution. Hence, digital transformation is the ideal solution to that problem. A digitally-enabled external supply chain network aids both CPGs and their associates by replacing outdated production workflows with a cloud-based solution. This is where Cargo Flash comes into the picture.
Step#2: Real-time data visibility for receptive communication
Network visibility is essential to responding, quickly and effectively, to plug shifts and disruption and only a digitally-enabled supply chain network can act on this real-time visibility. CPGs can track their ongoing projects, real-time, by using the digital data that flows from external suppliers. Additionally, they will assess which suppliers, in their network, can respond to last-minute requests, such as special or rush orders. By leveraging real-time data on a centralized platform, any network gains first-time clarity and responsiveness.
Step#3: Added advantage of a digitized network
A digitally-transformed external supply chain can deliver several operational, and financial benefits resulting from greater agility. However, one of the prime benefits is the enhanced relationships between a consumer brand and its external suppliers. By sharing data and working together to fulfill orders, mutual trust is built, and both sides of the relationship win.
