Logistiek, Netherlands: Cognizant’s Director of Consulting for Strategic Services Lists Seven Modern Challenges in Supply Chain

“Cost savings are no longer enough,” writes Stephane Weishard. “Forward-thinking manufacturers and retailers are turning their supply chains into value webs to achieve not only innovative productivity gains, but also sustainable profitability.” Excerpts:

“Like all companies in the mobile information age, manufacturers and retailers are at a crossroads. To compete in a highly globalized and informed market, they must simultaneously grow and sustain revenues, reduce costs, and boost productivity like never before.

What role, then, can the supply chain play in meeting those objectives? Forward-thinking companies like Amazon are turning to “omni-channels” and social, mobile, analytics, and cloud (SMAC) technologies to exploit new markets, outsource non-core processes, rejig distribution, and carry smarter inventory. This is all part of a growing trend to create adaptive supply chains or “value webs” as they are known.

Seven modern supply chain challenges:

1. Instant gratification. Digital natives and millennial mind sets demand immediacy. When armed with more product information, price comparisons, and crowdsourced reviews than ever before, they are capable of crushing ill-prepared, passive, or otherwise traditional supply chains.

2. SMAC technologies. Not so much a challenge as an enabler, SMAC technologies affect everything from demand planning to research and development. However, rather than taking a one-off approach, manufacturers and retailers must overcome technological barriers and organizational resistance by holistically harness them to create more adaptive supply chains.

3. Shrinking product lifecycles. Not only do consumers want things “right now”; they expect updates and revisions of those same things more often. Otherwise, they are likely to move to the next deal.

4. Globalization and disparate sourcing. Over the last decade, the world market has become truly global. Consequently, disparate overseas sourcing introduces an array of implications, such as greater need for visibility, synchronized supply lines, consistent quality, regulatory compliance, and more closely managing logistics.

5. Omni-channel commerce. Retail, direct, online, apps—with so many ways to transact, customers are putting greater pressure on the supply chain, forcing the best companies to monitor social feedback and trending data to predict when and where an order must be fulfilled.

6. Off-premises computing. Although a key component of SMAC, off-premises or “cloud” computing is changing the way companies compute, order, satisfy, execute, and fulfil modern orders. As such, cloud computing has become a key enabler of adaptive supply chains, providing further cost savings and information accessibility.

7. Demand-planning processes. No longer can supply chains solely react to demand; they must predict it using social networks, conventional Web, and trending data as real-time signals. It is now not only a question of segmenting or forecasting; it now has an element of prediction and micro-segmentation, in order to be able to not only to fulfil but also to anticipate what the consumer needs.

As companies in manufacturing and retail strive to create adaptive supply chains, they need to identify the best supply chain strategies to operate with maximum speed, efficiency, and flexibility. An adaptive supply chain is a critical weapon in responding to compressed market pressures.”

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