Companies are losing money by ignoring their supply chain.
Most of them do not even realize that they are ignoring their supply chain. They have multiple teams analyzing everything that happens every single day. There are procurement, transportation and inventory groups that are responsible for the best bottom line they can achieve. Certainly the supply chain is being looked at every minute of every day.
Companies are ignoring their supply chain strategy which means their entire supply chain is in question. The reality is that daily analysis of the supply chain is hindered by one key fact: the supply chain’s infrastructure is fixed and set by management. Given the current infrastructure, everything may actually be running well. However, if the fundamental infrastructure is not correct then everything on top cannot be treated as accurate.
Over the past several years, many organizations have faced a rapidly changing marketplace for their goods and services – often from both the customer and supplier spectrum. The Great Recession led to a shift in consumer desires as well as a migration to urban centers. Suppliers have been reevaluating their off-shoring decisions and have found the US, Latin America and South America to be welcoming environments. Changes to both sides leads to the need for fundamental supply chain strategy shifts.
As there is not foreseeable end to on-going economic uncertainty it is important for every organization to adopt an agile strategy for their supply chain function. Continuing to not address the fundamental changes occurring to the business will result in an increasingly costly supply chain. The net effect will be limited business flexibility and a more costly change down the road.
It is through the application of data, business intelligence and agile strategy that businesses can make course corrections. The era of supply chain strategy evaluation every 3 to 5 years must naturally end because the world moves faster than that now.