Read this blog to learn more about Supply Chain Predictions from our Demand Prediction experts
Hindsight is 20/20 as we look back at the predictions made about what was to be expected from this “eventful” past year. Rather than recapping 2020, we choose to look forward. There have been many supply chain challenges this past year — some will last, others will not. Our demand prediction experts offer their views on supply chains in 2021.
Organizations still using paper-based systems have suffered greatly during the pandemic. If they could not find their suppliers’ records or contact details, even the smallest disruption tremor could turn into an earthquake. Even moderately digitized supply chains often encounter challenges if they do not have transparency and analytics built into their systems.
In the post-pandemic world, digitization has become almost mandatory. Digital transformation technologies include more than just online purchasing. Automation technology for reporting, artificial intelligence of analysis, and cloud-based record-keeping that can be accessed anywhere instantly are must-have technologies going forward.
In response to lockdown regulations, retailers have shifted to selling their store stock to clear excess inventory or as a way of alleviating pressure from their online warehouses. In 2021, retailers need to move away from just thinking about clearing short-term problems and take a more strategic approach. This may mean forecasting demand using fulfillment methods, ensuring inventory is at the right location to meet omnichannel demand, and ensuring the right inventory level is in the right position to enable convenient, omnichannel shopping while minimizing costs and risk to the retailer.
From a demand prediction perspective, the impact of COVD-19 is likely to continue for much of 2021, so the continued pressure on online ordering and multi-fulfillment options remains. Flexibility is crucial to manage stock and keep up with ever-changing consumer expectations.
AI Assists with Unpredictability
The lack of automation has slowed many supply chains down during the pandemic, with many organizations having to increase manual intervention in response to fluctuating demand and supply. In 2021, organizations need to adopt AI to help manage these difficult-to-predict swings in demand. Supply chains have to be flexible enough to keep up with the on-going changes in consumer behavior or how daily life changes as a vaccine rolls out. AI can be leveraged for improved decision making on everything from sourcing items at short notice to figuring out logistical plans.
More Robust Supply Chain Demand Prediction
2020 made it clear that traditional approaches do not work in a time of crisis. For decades, organizations have focused on reducing their supply base and cost-cutting while streamlining their procurement strategy. But with fewer suppliers and smaller inventories, many organizations could not react swiftly during the pandemic. Instead, they ran out of stock and failed to meet customer demand.
2020 proved that one of the most significant threats to any organization has become logistics and supply disruption and that relying too heavily on a small number of vendors can be crippling. As a result, we predict that senior management will continue to look toward sourcing, purchasing, and inventory as places of improvement.
A renewed focus on supply chains requires supply chain planners to rethink their roles within an organization. They have to consider more local options and a digital transformation strategy to detect risks and inform decision-making. Supply chain agility will become key to an organization’s success.
With supply chain planning and optimization moving into the spotlight in 2020, it will only continue to grow in importance throughout 2021 as more and more organizations seek to automate their processes. To learn more about how modern cloud-based solutions, such as CCH® Tagetik Supply Chain Planning, enable supply chain planners to use capabilities like advanced analytics, artificial intelligence, and scenario planning check here.