What is The New Supply Chain Normal?

Share This on Linked In

In A New Supply Chain Normal?, Dan Gilmore of the Supply Chain Digest asked if there will be a new supply chain normal coming out out of the recession as many of the financial experts are expecting a new financial normal. His answer was that there will be a new normal for quite a while because important changes in the consumer consumption, business, and government will inevitably drive new requirements and responses from the supply chain.

In an effort to identify what this new normal would be, he asked a number of leading experts to weigh in with their take. Some of the more important points were as follows:

  • A greater focus on network efficiency as fuel prices rise permanently.
    Dr. Tom Mentzer, University of Tennessee
  • There is no new norm because the pace of supply chain change is too rapid. Supply chain success will only be achieved if the supply chain has enough flexibility and modularity.
    Dr. Jim Tompkins, Tompkins Associates
  • Permanently increased volatility. Constant currency fluctuations, cautious customers, and rapid swings in the price and availability of key commodities are just a few areas where we may never see stability again.
    Bill Read, Accenture Supply Chain Practice
  • The acceleration of risk mitigation. Optimization, simulation, and plan auditability will be critical.
    Richard J. Sherman, Gold & Domas Research

And they all had a common thread. Constant, sometimes rapid, change. This means that the new normal is really the old normal, just sped up. Instead of worrying about fuel price increases, currency fluctuations, or raw material availability over years, you’re often going to be worrying about them over months. Shorter, more unpredictable, product life-cycles. An even greater need for spend analysis and optimization. And a greater need for risk visibility, management, and vigilance.

For more insights into what the experts had to say, check out The New Supply Chain Normal: Supply Chain Gurus Weigh In which dives into the views of Dr. Tom Mentzer and Dr. Jim Tompkins, and The New Supply Chain Normal: Supply Chain Gurus Weigh In, Part 2 which explores the insights of Bill Read and Richard J. Sherman.