According to Erik Wanberg, the head of inventory at Taulia (a provider of working capital solutions). Shifting demand, made worse by material shortages, has created extraordinary supply headaches for retailers & manufacturers in all industries.
Digital infrastructure is key to rebuilding supply chains as resilient “networks” in his opinion. Nucleus agrees.
Shifting demand, compounded by material shortages, has created significant supply headaches for retailers and manufacturers in all industries.
Reports of stockpiling and over-ordering to meet unpredictable demand are common. In an economy much changed from the prepandemic seamless and open one in which global supply chains as we know them have developed, it is clear that new technology and new thinking are needed to ensure resources can be properly managed and maintained.
Digital infrastructure and real-time information will be key to this, but so too is the reality that linear supply chains must be reimagined as ‘networks’ to ensure that both risk and resources can be evenly distributed. This is one of the reasons that Nucleus is structured and operates the way that it does. Our 4PL Supply Chain as a Service(SCaaS) business model ensures that we are not entirely reliant on any single service provider.
Since the 1980s, globalisation, and therefore global supply chains, have developed rapidly during a period of relative geopolitical calm. As a result, the process of finding buyers and suppliers in an open international market has been relatively simple, relying only on price, capacity, and service.
Broadly speaking, commodities of every kind have been available and affordable for a very long time, keeping consumer spending stable and, critically, predictable. The supply chains that have supported this have therefore been large, but they have been simple.
However, geopolitics and economics are perhaps now more complicated than they have been for at least 40 years, and this has changed the rules of the game. Consumer habits are also perhaps at their least predictable in that time too, as they realise the increased costs of living. Amid varying lockdown policies, ongoing wars, and spiraling price pressures, linear global supply chains are facing their first real systemic and structural challenges at both ends of the spectrum.
Perhaps for the first time, businesses have been forced to reassess what constitutes security in their supply chain and are diversifying their networks in order to ensure supply is steady.
At the core of the problem is the fact that supply chains have developed in comfortable global conditions. This means that most have developed without the type of technological infrastructure and real-time information that can mitigate supply and inventory issues. These technologies are available, but with most businesses playing catch up when it comes to optimising data and inventory visibility.
According to him, and as Nucleus has known for years, "we now must consider a new age for supply chain management whereby adaptability, reliability, and communication are foundational." A global ‘shoring-up’ phase is imminent, and it is necessary. Pre-pandemic conditions are unlikely to return, meaning that predictability, which has been taken for granted for decades, can no longer be relied upon.
He also thinks that, as digital infrastructure is more commonly implemented to help manage supply and inventory challenges, supply chains will gradually become diverse, agile, and perhaps predictive. In time, we may even refer to them as supply ‘webs’ or ‘networks’ that provide the foundation for more informed decision-making in managing complex supply chains.
At Nucleus, we think so too. And have operated as such since long before the pandemic and global uncertainty made it(we think) patently obvious that this will be the reality in the future.
Source: Supplychaindigital
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