An attempt to internalize these realities within a specific industry or business environment quickly reveals what we intuitively know: We are not very good at predicting seemingly straightforward changes and their effects on our supply chains.
Supply chain and logistics managers should be constantly reviewing their network infrastructure and transportation flows and testing them in a modeling environment. The goal is to develop an agile network that is robust, provides low cost and high service under the widest possible range of business conditions and can be easily transformed once a key tipping point is reached.
1. Set yourself up for success. Consider using an independent partner, one that is deeply familiar with supply chain design, your industry challenges, and the various tools available in today’s technology marketplace. Strategic and tactical planning is too important to skimp on.
In the absence of a standard, repeatable process for supply chain design, decisions are made in decentralized silos, often with sub-optimal results. One manufacturer of consumer goods realized that it lacked cross-silo decision making. Its procurement, manufacturing, and distribution decisions were being made independently, each with a different set of constraints and data assumptions.
The realities of the new global economy are a reminder that we operate in a complex and dynamic environment. The future is unpredictable, and the best way a company can manage uncertainty is to continuously assess its supply chain and transportation networks. By establishing an ongoing business process that evaluates a supply chain’s design and its ability to respond to changing market forces, a company can have confidence in its plans, even under uncertain conditions.