Supply chain strategies in a challenging economy

Peter Jones

Managing Director, Founder

With an imminent global recession forcing people to tighten their purse strings, the pressure on supply chains has started to ease. Peter Jones, Managing Director and Founder at Prological says this creates the perfect time for supply chains to start planning for the future.

The past few years have exposed supply chains to exceptional pressures. Covid-19 accelerated the move to e-commerce and with that came increasing consumer expectations for next day – often same day – deliveries alongside an explosion in demand. Undeniably, our supply chains bent – often really, really far — but they never seemed to break

While organisations would be forgiven for taking their foot off the proverbial gas during this brief lull, those who continue to push forward and shift their supply chains into next year will reap the rewards in the future.

Positive and proactive planning

With people feeling the pinch of the rising cost of living, consumers had started to reign in some of their spending prior to the Christmas peak and we had started to see volume dropping off and pandemic pressure relieved.

This unfamiliar breathing space within any supply chain is the prime opportunity to invest, and to strengthen the supply chain ahead of when spending and demand return to normal.

Supply chain managers must shift their thinking from being reactive and taking their future supply chain in a positive, proactive direction. What supply chain leaders should continue to do is demonstrate that, as a sector, they have their finger on the pulse when it comes to the future of business planning, the latest technological advancements and how best to make operations resilient.

Putting the customer first

In supply chain, everything you do and every decision you make, is about servicing customers. The business plans of the future should put customers at the heart of every decision. By realising the consumers’ expectations and understanding their demands, organisations will have a much better assessment of what their supply chain must deliver.

While things might be quiet(er) now, when we’re back to normal, not understanding the demands of your customer will undermine your ability to meet their expectations during the next spell of chaos. When the economy starts to recover and demand does turn back on, organisations don’t want to be left with a supply chain lacking the capability to scale and compete as the market returns.

Furthermore, in the face of adversity, businesses that can organise their supply chain to continue to fulfil that customer expectation, will come out of these difficult times, with a much higher degree of customer loyalty and an increase in market share against their competitors.

Cost cutting

While it may be tempting, this period of calm is not an opportunity for businesses to cut costs in its supply chain – far from it. That decision will only damage an organisation in the long term. The temptation for businesses to start pulling money and resources away from the supply chain is present. However, it has never been more important to invest in supply chain by adopting new technology, using artificial intelligence and hiring and training more staff.

At Prological, we work with businesses to optimise their current operations while supporting them through the investment and commissioning of new technology. In our White paper: A guide to operational excellence, we laid out how businesses can invest in their supply chain to ensure they are ready for the challenges of the future.

We have seen many businesses change their entire operation in recent years – going from just servicing store networks to high levels of direct-to-consumer fulfilment. With this rapid evolution in the supply chain there have also been expensive mistakes and fundamental flaws. As we move into a more automated world, any organisation thinking of investing in technology needs a strong, robust business plan to refer back to.

Back to basics

Planning for the future should be about yourself getting your supply chain strategy lined up with your business’ strategy. There is a sense that 2023 will be all about going back to basics – putting the customer at the very heart of your business plan and understanding how your supply chain can grow to deliver its promise.

The global downturn will shift those businesses back to planning and advocating agility. Businesses should have learnt by now, that the key cog of business success is their supply chain; and so, businesses need to use this opportunity, not to turn attention away from the supply chain, but to take this brief moment of relief to move their supply chain forward.

After the incredible work of supply chains over the last few years, now is the time to push forward, to move to a generation of supply chains that sets businesses up for the next profitable and pressurised season.

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