The Keys to Strengthening Supply Chain Operations in 2022

The Keys to Strengthening Supply Chain Operations in 2022

Feb. 14, 2022
While supply chain disruptions will continue, there are actions that can be taken to build up resiliency as the year continues.

As we continue to move deeper into 2022, the problems that have plagued supply chains in recent years have not subsided. Industries and consumers continue to grapple with the monumental impact everything from port congestion and product shortages to the rising cost of consumer goods have placed on global supply chains. While organizations can expect to see these disruptions continue, those that take the following actions will be well-equipped with the right tools and skills to build up supply chain resiliency as the year continues.  

Build End-to-End Visibility into Product Tracking 

Given the recent spike in consumer demand for sustainability, companies can expect the need to track shipments to their source will increase. Consumers are willing to pay more to know where their products are coming from, and that will be a catalyst for organizations to invest in visibility technology. Previously, there was not much investment into track and trace technology due to high costs. However, in 2022, investment in the Internet of Things (IoT) will revolutionize supply chains by offering real-time tracking for raw materials and final products with cheap and reliable seniors. Investing in these technologies will be key for organizations under pressure to achieve true transformation, satisfy customers and capture new markets. By offering real-time access and visibility into supply chain data, it will allow organizations to produce more responsive and competitive networks. 

Dedicate Resources to Increasing Resiliency 

As proven in the previous year, complex and globalized supply chains are prone to be vulnerable to disruptions. When one part of the network is exposed to global risk, it threatens every single link of the chain – Plan, Source, Make, Deliver and Return. Building resilient and agile supply chains have been top-of-mind for professionals for years, but recent events have escalated it to becoming one of the most prominent themes in the industry for 2022. It will require data expertise, novel solutions and strong collaboration among global networks. Successful companies will create tools and processes that anticipate risk and develop mitigation strategies for specific events before they occur.  

Organizations should focus on creating flexible supply chains that can adapt to instability by diversifying suppliers, production capabilities and transportation procession. They should explore alternative materials and non-traditional suppliers/partnerships to ensure they are prepared with backup plans in case of a disruption. Alternatively, incorporating resilience into an already agile and responsive chain design will enable companies to mitigate adverse events faster than the competition, take market share, and outperform competitors in customer service and value generation. 

Transition to Digital Supply Chains 

Digital Supply Chains will transform the industry from a loosely connected set of data, processes, and people to become a fully integrated end-to-end chain with visibility from customer demands to final products. To achieve successful digital transformation, companies will need to invest in the right vendors, systems, technology and people. This will require large-scale sensor implication (IoT), shared internal and external interfaces (cloud-based networks), process automation and verification (blockchain) to drive internal and external visibility, ROI and customer service. Those who can develop the skills and disciplines needed to maximize the use of these technologies will have supply chains that are not only more efficient but also more agile and resilient. 

Create a Customer-Centric Approach 

Customer-Centricity is top-of-mind for supply chain professionals around the globe as they push themselves to meet the exceeding demands of consumers. The growth of e-commerce, especially in the past 10 years, has transformed the expectations of customers – people want their products promptly and at the lowest cost. Additionally, there has been an emphasis placed on brands that exhibit ethical and sustainable business practices. Unfair labor practices, environmentally damaging products and socio-political learning are all situations that could cause customers to boycott certain brands. The combination of these pressures means that, for brands, it’s no longer about having a great product, but an exceptional reputation in their community as well.  

To meet the pressures from consumers, supply chains must respond by increasing inventory levels or leveraging creative technological solutions like demand planning or procurement analytics. Additionally, organizations should look toward upskilling talent with greater cross-function and analytical skills to support these new levels of customer-centricity. Those who are able to meet today’s escalating customer expectations at the lowest cost will prevail. 

Abe Eshkenazi, CSCP, CPA, CAE is the CEO of the Association for Supply Chain Management 

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