Read this blog to discover the value in Supply Chain flexibility.
Supply chain professionals are well accustomed to facing the unexpected in difficult circumstances, and the global COVID-19 pandemic has increased the stakes. Worldwide lockdowns have put tremendous pressure on supply chains, exposing faults and revealing what is truly needed to keep a global economy functioning. While demand for some products has surged, leaving suppliers scrambling, demand has evaporated completely for others.
Supply chain flexibility – the ability to easily adjust production levels, raw-material purchases, and transport capacity – has immense benefits compared to traditional supply chain management. A traditional approach to supply chain management is rigid and does not allow for rapid changes as needed. This is known to cause disruptions to the entire supply chain when demand spikes or plummets or when there is a holdup in the supply chain. Flexibility in the supply chain allows it to function by accommodating the day-to-day changes that naturally occur.
Supply chain professionals must navigate challenges using a platform that distills meaningful insight from vast amounts of high-quality data. This enables scenario modeling, multi-echelon inventory optimization (MEIO), and other advanced applications that build flexibility into supply chain planning and allow the end-to-end impact of any pivot to be quickly assessed.
Ease of Scaling
Supply chain flexibility means an organization can easily scale to meet the needs of its consumers. With a rigid supply chain, planners cannot immediately scale to meet an uptick in business or scale down when business is slow. Instead of relying on a rigid supply chain planning method, supply chain professionals should implement tools, such as CCH® Tagetik Supply Chain Planning, to deploy event-based planning strategies that allow them to pivot production and locations quickly and scale other facets to keep up with challenges. This builds the flexibility needed to succeed in fluctuating market conditions.
A flexible supply chain adapts to meet the natural ebb and flow of your business, rather than resources being wasted due to the inability to make immediate changes. In many cases, such as with COVID-19, changes to various aspects of your supply chain will be necessary, as will the ability to scale up or down to meet demand, so you do not miss out on potential revenue or have spoilage.
Another valuable aspect of supply chain flexibility is the reduction in liability. Various aspects of supply chain management carry heavy liability because of the inherent risks and dangers of the production and distribution of products. Accidents, such as products lost or damaged in transportation, and disruptive events, like the COVID-19 pandemic, can and will happen. With a flexible supply chain, organizations can react to these disruptions swiftly, allowing them to lessen their liability, maximize profit, and mitigate supply chain risks as they scale.
When organizations have the technology to enable supply chain flexibility, potential disruptions in the supply chain have been considered and planned for, making companies both more efficient and able to react quickly. While achieving flexibility is difficult with rigid spreadsheet-based forecasting, platforms using artificial intelligence bring flexibility into the supply chain with ease. CCH® Tagetik Supply Chain Planning is built upon an artificial intelligence foundation whose algorithms drive many platform functions, including forecast method selection, demand prediction, scenario modeling, and task automation. Using an intelligence-based approach to flexible planning delivers resilience to your supply chain planning that outperforms the exceptional and the unexpected.
Reach out for a software demo to see how CCH® Tagetik can improve your supply chain flexibility today.