Daily Archives: May 21, 2013

Summer is One Month Away. Is Your Supply Chain Ready?

It should be. Why? The top three challenges you are likely to face this summer are the exact same as the top three challenges you faced four years ago in 2009. Back in 2009, Kelly Thomas, Group Vice President of Global Accounts at JDA and a regular contributor to JDA’s Supply Chain Nation blog published a guest contribution in the Supply Chain Digest on the Top 3 Supply Chain Challenges This Summer, which are also the Top 3 challenges your supply chain is going to face again this summer because, as we all know, the economy is cyclic and some cycles are faster than others.

So what are the challenges?

1. Cost Containment

Costs are soaring again. As SI has stated repeatedly, there are no more savings to be had in this type of inflationary market. The best you can hope for is cost avoidance, and in some categories, containing costs to reasonable year-over-year increases. With staple food reserves still low, burgeoning demand for energy and metals in Asia, and a slowly recovering global market, costs are going up — and can be expected to do so for some time. The time of net zero inflation is over. The best we can hope for is we don’t return to the 80’s. While those of us who have been around for a while may have fond memories of the 80’s as the decade that gave us PCs and Pac Man, we also have not-so-fond memories of rapid inflation at the start of the decade (which we try to forget). Containing costs is going to take your fanciest footwork (so let’s hope your old timer purchasing pros who weathered the storm in the early 80’s are still around to give you some advice) and may not even be possible if you don’t have a good handle on

2. Risk Management

Considering that, as SI has been pointing out for over a year now, at least 80% of organizations are vulnerable to a major supply chain disruption, every company should have someone responsible for managing risk. However, two thirds of company’s don’t. This is one of the reasons risk, and risk management, continues to be high on the challenge list. But I have to be honest. It’s going to be hard to get a good grip on risk if you don’t have a handle on your number one supply chain challenge this summer, which is

Supply Chain Visibility

Let’s be honest. In today’s multi-tier, multi-national supply chain, it’s hard enough to get a handle on this at the best of times. But during the summer, where it’s likely that there won’t be a single day where there isn’t at least one key person vacationing somewhere unreachable and not watching that everything is going as it should, something is going to get missed. Something is going to go wrong. The only question is whether the screw-up is minor, such as shipping 1000 units instead of 1100, or major, such as shipping merchandise intended for the US to Europe instead and having it seized and destroyed because it violated WEEE or some other environmental regulatory act that is stricter than what it is currently in the US.

Considering the complexity of the modern supply chain, the speed at which it is operating, and the costs associated with even a minor mishap, this is one area where you definitely need a software solution to help your organization keep a handle on things. One such solution is that offered by Resilinc, which is covered in these recent posts: