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Turning the Supply Chain From Ugly Duckling to Beautiful Swan

Photo: Courtesy of Fabio Jock

Jim Tompkins

Founder and Chairman, Tompkins International

The supply chain has undergone several transformations over the past few decades. Throughout the 1980s and ‘90s, the main objective of supply chain management was cost reduction, which was typically achieved by minimizing inventory and outsourcing manufacturing. 

As consumer expectations continued to grow over the past 20 years, supply chain objectives have shifted from simply cutting costs to increasing profits. With the proliferation of online shopping, improving delivery speeds, order accuracy, and the overall customer experience are all ways for organizations to drive profitable growth through the supply chain.

Then a perfect storm hit in 2020, when just as ecommerce was already booming, the COVID-19 pandemic created a ripple effect that shook supply chains across the world, prioritizing the need for resilience and agility to ensure business survival and longevity.

A heavy dose of disruption

The COVID-19 pandemic revealed many weaknesses in traditional supply chain models. Supply and demand were out of sync, from the shutdown of supply production and shipping, when the virus initially spread through China, to the unpredictable demand due to changing work and lifestyle habits, and stockpiling in the Western world. 

The level of uncertainty and lack of flexibility in supply chains made it difficult for many organizations to quickly and efficiently pivot their operations to accommodate changes in manufacturing, volume, shipping, and delivery.

Part of the problem stems from the traditional, linear supply chain model, where information — and complications — flow from one link to the next in the chain. Minimizing risk and impact requires organizations to move away from the linear supply chain structure and into a connected digital supply network that provides end-to-end visibility and real-time planning, collaboration, and execution across all functions, partners, and suppliers within the ecosystem.

Software saves the day

As the supply chain model has evolved, so too has the technology and requirements for effective supply chain management. Building a resilient, agile supply chain requires sophisticated software capable of dealing with constant disruptions, and shifting as business and customer needs change.

The end-to-end supply chain of a product could contain hundreds of points, from the individual materials manufacturers to the consumer’s hands, making access to real-time, reliable data more important than ever. Control tower solutions provide total visibility and collaboration across the entire network, and utilize artificial intelligence and machine learning to predict and resolve problems in real time. These solutions deliver actionable insights that enable organizations to make better business decisions based on the highest service level at the lowest cost.

With an end-to-end view of the entire network, organizations can quickly identify and correct issues quickly to minimize risk, profit loss, and service disruption, while maximizing efficiency and customer satisfaction. 

In addition to providing complete visibility of all partners within a network, control tower solutions can also integrate and interpret external data, such as weather and traffic updates, to predict and prevent potential disruptions. Control towers range in functionality and maturity, with advanced software solutions even offering autonomous planning and decision-making across the network.

The digital supply network model and control tower technologies provide organizations with the agility needed to quickly adapt to address whatever is happening at the moment. This was witnessed when apparel manufacturers shifted operations to produce face masks and hospital gowns, and distilleries pivoted to produce hand sanitizer when supply was scarce. 

Preparing for the next normal

While we cannot fully predict or prevent disruptions in today’s volatile and uncertain world, we can minimize the risk and impact by building more resilient supply chains. Achieving maximum resilience requires agile supply chain solutions with the ability to quickly pivot from one option to the next to deal with the disruption of the moment. 

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