In a globalised economy, with digital technology enabling companies to regulate their supply networks and create competitive advantage – often in terms of unit cost, supply chains are today more interrelated and mutually dependent than ever before.
Gartner's Supply Chain researches noticed that a foremost concern for Supply Chain (SC) leaders is the increase of Complexity, caused by a range of factors often the result of rising customer expectations for faster lead times, expanded products and services, and tailored experiences.
How does the Supply Chain become more complex?
As we look to expand our businesses and provide for our current customers, we see a SC growth in Complexity in these significant ways:
· Growth in supplier/partner relationships: supplier and partner relationships are critical to expanding your trajectory as a company, both with current customers as well as reaching new ones. However, it enhances Complexity not only as to supervising all of these relationships, but when entering a deal, assessing and improving the use of these interactions. Supplier collaboration and visibility are crucial to success.
· SC steps grow up: with the increase of our customer’ bases and product lines, our SC steps have consequently stretched out more moves required to fulfil orders within a variety of manufacturing or transportation combinations. In every single case, gaining visibility into each level of the SC is essential, so you can handle exemptions in real-time and transparency to place the right opportunities for customers.
· Massive-diverse orders: with multiplied product-lines, a variety of shipping options and expanded-geographic delivery, this approach has strained the capacity to fill orders. With more flexible and agile strategies, the customer orders arrive on time and at a reasonable cost. We can say we are dealing with personalised-micro SCs for each customer order.
· Inventory across multiple parties: it is a complex ecosystem, especially that not in use, forcing negative cost-effectiveness; inventory is not only stored with our manufacturing-warehouse stakeholders, but with our suppliers and partners too. We are getting real-time visibility and control across our entire internal and external network of partners, preventing the augmented of unused inventory through the system.
· Availability of data: the enormous-obtainable data across the SC is used to bring about more informed decisions; thus it should be a massive data you rely on, both to make forecasting and real-time decisions on customer orders in your SC. When putting in multiple systems and partners, we generate gaps in our data, intensifying Complexity where we need greater SC visibility.
· Faster lead times: with quick shifts or tailor-made manufacturing, our lead times are to a large extent, shorter to meet customer demands.
· Custom-made and profoundly delivery expectations: customers want to know where their order is and receive the most accurate expectations for delivery; not the fastest but the accuracy of shipment.
· Multiplied products and services: Mass and “endless aisle” concepts have expanded the products lists; moreover, associated services such as technical installation, repair services or maintenance, come to be more specialised too.
· Companies require expansion. The post-internet environment brings a significant opportunity for every business to grow and grasp a far-reaching customer base, adding to the complex ecosystem.
· Expanding markets: we’re witnessing a mass expansion by most businesses. It adds Complexity in the form of new suppliers, 3PLs, faster handling, lead times and possibly new fulfilment conditions.
· New locations: expanding regionally or internationally sites, intensify several high-points that need completing for each customer’ order fulfiled. The expansion of new places requires investment into new facilities and partner relationships.
· Consolidation has been a significant driver of Complexity for many large firms. It takes years to remove duplicated processes and merge business processes after an acquisition; integrations demand to connect the diverse IT infrastructures.
· Customer expectations are driving innovation, as they have evolved dramatically in the last years. Buyers require transparency and flexibility in the purchase process, transforming fulfilment into vital necessities, looking to sustain and expand their present-day customers. Brand owners demand tremendous cooperation from coworkers, better-quality inventory management, clearer visibility and direction into all SC stages.
Summing up: customer’ expectations bring innovation as they evolved. Buyers demand transparency and flexibility while focusing on the fast-track purchase process, transforming fulfilment into necessities for such enterprises that are looking to sustain and expand the company with their present-day customers. It’s about accepting Complexity as an opportunity in your Supply Chain.
Dave Food
Prophetic Technology
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