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Supply chain trends in 2022: Are you ready to beat the heat?

It’s a matter of reimagining our ways of working, ones that we have followed unquestioningly until we run into a brick wall.

Supply chain trends in 2022: Are you ready to beat the heat?
[zapp2photo /AdobeStock]

It’s a matter of reimagining our ways of working, ones that we have followed unquestioningly until we run into a brick wall. COVID-19 has taught us that that brick wall is never far away and always where we least expect it. The best we can do is try to sense when it’s likely to come up and pivot quickly enough to avoid ramming into it headfirst. On that note, let’s see what interesting trends are making the rounds as we navigate 2022.

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SUPPLY CHAINS WILL CONTINUE TO BE STRESSED ALL OF THIS YEAR, TOO

Following a nightmarish stretch when businesses had to deal with everything from material scarcity and inflation to manpower shortages and port congestions—and the result that entire value chains have been disrupted — we now have a perfect storm that has been nearly a year in the making, and the likes of which we’ve never seen before. As a result, cost pressures are at an all-time high, which means that unless businesses can control them, they’ll get transferred to shoppers, who will end up paying more for less.

AI WILL HELP BUSINESSES MAKE THE LEAP FROM SURVIVAL TO GROWTH

Following the hard lessons of the past nearly 24 months, businesses are fast realizing the importance of investing in, and building, intelligent supply chains. Given that nearly all businesses have already been gathering data for years, they are now looking to leverage the insights they can gain from across their value chains, shifting from discrete, point-solutions to a more evolved platform approach to acquiring supply chain agility and resilience.

Thus, businesses are looking for more practical, realistic and transparent solutions to supply chain issues as they look for newer ways to meet demand cost-effectively.

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WHEN YOU’RE ALREADY UNDER STRAIN, DON’T STRETCH FURTHER

Demand for home delivery is not only here to stay, it’s set to consistently outstrip capacity to meet it.

The knee-jerk reaction for most companies in such dire situations is simple: Double down and deliver. Sure, no business likes the idea of missed orders, but how logical is an approach that consistently pushes limits? The truth is, every man and machine has an optimum capacity, pushing beyond which is just asking for a breakdown. And this applies to every resource deployed along the entire length of the value chain.

In short, the trick to rising above today’s insatiable demand is not a matter of working harder — it’s a matter of working smarter.

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KNOW YOUR FACTS — DATA NEVER LIES

A few months ago, the American Trucking Association (ATA) reported that the U.S. was facing a shortage of 80,000 truckers, which was one of the major factors worsening already appalling supply chain chaos. While this was largely attributed to the belief that truckers had quit their jobs during the pandemic-triggered lockdowns as they sought work and wages, data has revealed that current trucking employment is barely different from pre-pandemic levels.

This means that the shortage is because of new demand, which requires an entirely recalibrated approach to management. But the main takeaway is that the gap is more of a natural lag — one that the market is actually rapidly catching up with. On the other hand, overworking an already exhausted workforce is by no means an intelligent, or sustainable, solution.

What does qualify as a solution is optimization. Unsurprisingly, businesses that embrace intelligent technology to do exactly this are already making headway into not only meeting the shortage challenge, but coming out profitable on the other side.

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CUSTOMER LOYALTY AND TRUST ARE IRREPLACEABLE

Running out of stock due to cliched supply chain issues just isn’t an option. No matter how true, it doesn’t fly as an excuse for, at the end of the day, customer disappointment. The only way to prevent loss of potential revenue is by adopting a proactive, demand-driven approach to order fulfillment.

It’s a well-known fact that it is far easier to retain an existing customer than it is to find a new one, so the better your demand sensing and planning, the higher your chances of ensuring continued revenue and growth. All you need to do is look at the data that’s already there right in front of you. It contains all the answers you need to know.

DON’T SET OFF A CHAIN REACTION

No matter what, do not succumb to the reflex action of blind over-ordering, over-producing and over-stocking. That’s just an unimaginative, self-destructive approach that exerts pressure on every node of the entire value chain—from suppliers to manufacturers to distributors. This will in turn set off higher prices, constrained supply, and extended lead times.

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Before you know it, the market will be flooded with things that have no takers (because who looked at the data to check what customers really wanted, right?), while what customers really want is disappearing like toilet rolls at the start of the pandemic because manufacturers are too busy focusing on the wrong stuff. And before you know it, you’re in a spot stickier than Scotch tape.

ANALYZE, PRIORITIZE, OPTIMIZE

One thing is obvious: Businesses cannot afford to fly blind anymore. They have to understand exactly what their customers want, know how much of this demand they can cater to given the resources they have at their disposal, and prioritize and optimize their operations to ensure they deliver what they commit to—on time and in full.

Fortunately, this isn’t as intimidating as it sounds. With intelligent supply chains, businesses no longer have to work on hindsight and prayer. They can leverage actual data to know exactly where things stand, and where they can take them to win a two-for-one special: realization of their business goals, as well as fulfillment of customer demand.

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Anita Raj is the VP of Product Marketing for ThroughPut Inc., an AI-Powered Supply Chain Software Company based in the U.S. & Germany.

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