Since our inception as both a supply chain management industry analyst research firm and a Supply Chain Matters global-wide blog presence, we have produced and made available our annual predictions for industry and global supply chains.
The purpose of these predictions is to advise our clients and global-wide supply chain management teams as to what to anticipate in the coming year as well as areas to focus on in strategy and tactical direction, business process improvements and technology investments. These predictions and their implications become the basis of our continued research and consulting agenda in the coming year. Feedback we have received indicates that this report often serves as a reference for many of our clients and readers.
Over the coming three weeks, we will be highlighting select portions of our ten specific 2021 predictions for Supply Chain Matters readers.
In prior blog postings, we have detailed our report’s two opening sections, namely what supply chain management teams should expect regarding global economic and financial forecasts, as well as an expected global supply network environment and trade landscape.
In this commentary, we highlight 2021 Prediction One: Enhanced End-to-End Visibility and Continuous Supply Network Risk Mitigation Becomes Essential.
Our first two predictions for the year 2021 already score high in various surveys undertaken among the global supply chain management community, and that is why we list them in this sequence. However, there are nuances regarding implication, approach and scope which we address.
The need for end-to-end supply chain visibility is not a new challenge, it has been a goal for a number of years. The challenge has been one of scope, context and technology path. Scope can be defined in dimensions such as global or regional supply network, customer fulfillment or logistics and transportation execution. Each has differing process visibility and decision-making needs.
We have grouped end-to-end visibility with continuous supply network risk migration because more often than not, the COVID-19 disruption in 2020 exposed this blind spot area. For supply chain management teams that consider themselves as laggards, this will be the prime essential goal. We state that for the obvious reason that securing senior management sponsorship for this area should be readily achieved with the right context.
There are many inherent definitions of what is implied by end-to-end visibility, and we recommend that it initially include the various tiers of the direct materials supply network. That is often equated to key suppliers, and in a lot of current cases, the deemed most critical suppliers. However, the goal should be direct materials suppliers whose parts and components can disrupt any particular key product’s production or customer fulfillment process. Knowing that information up-front is key and often requires bill-of-material analysis.
A further need for clarity of definition is whether end-to-end visibility is best achieved in supply chain planning, customer fulfillment or supplier management business process areas. We submit that determination from which area or areas this stems will be unique for different business and industry settings, or supply chain management segmented processes. Insure that such definitions are clarified and agreed upon. In today’s technology landscape, supply chain assessment and visibility is often grouped as stand-alone functionality targeted to procurement focused risk assessment processes.
A differing definition relates to services-based businesses and fulfillment networks, such as in retail or services delivery businesses. End-to-end visibility in this area is a focus on customer fulfillment execution.
In all cases, definitions must stem from an outside-in perspectives, what do customers expect and demand in products and services from purpose, quality and service level dimensions including information sharing and alerts.
Achieving end-to-end supply chain visibility is often placed in the context of a technology-led initiative, and that we submit is not the most ideal approach. We advise teams to context this initiative as a cross-functional supply chain management effort, with active supply chain leadership sponsorship and resource support, that will umbrella supply chain strategy and planning, product management, operations and the procurement function.
Too often, end-to-end visibility or supply risk management can take on sole supply chain planning, operations or procurement leadership, where information can be isolated to singular functional systems or internal functional management reporting. Supply chain risk identification and mitigation is clearly now a business mission critical objective requiring senior management awareness, as well as integrated business planning involvement.
In the area of end-to-end supply chain risk identification and mitigation, the risks can be in areas of supplier financial strength, operational readiness, known product vulnerabilities or early warnings to an actual occurrence of an unplanned disruption. Such information needs to be shared and assessed from various supply network perspectives, including alternative strategies or pre-planned contingencies or highly responsive tiger-team actions. When seeking a technology solution, consider providers who architect their technology for seamless exchange of information, without placing an added financial or resource burden on suppliers. Heed the lessons garnered from the termed industry exchange platforms that came to the forefront over ten years ago, many of which led to approaches that were too vendor or platform specific.
After achieving organizational alignment and broad focus, end-to-end supply chain visibility can readily be achieved by today’s Cloud based technology either in B2B supply chain platforms or in specialty supply chain risk applications. A cross-functional supply chain management technology selection team should primarily base their selection criteria on universal access of information, avoiding yet another supply chain island of information. A further selection consideration should be rapid deployment and ease of use for all parties, including suppliers.
With the highly uncertain economic environment requiring added scrutiny by CFO’s for additional costs, technology selection teams should conduct adequate due diligence to ascertain technology solutions that can meet objectives, support flexibility to business changes and have a track record for timely implementation at the most reasonable short or longer-term cost.
We anticipate new technology vendor entrants to the supply chain risk assessment and mitigation area including some existing best-of-breed supply chain technology or ERP providers. This is an area where specialized professional services providers leveraging artificial intelligence and machine learning technologies will increasingly be offering customized technology approaches.
The year 2021 will feature the initial coming together of global supply network design, planning and supplier risk assessment technology approaches. We anticipate added acquisition developments in this area because of hot market interest. Keep these possibilities in-mind and insure that vendor selection has a broad-based capabilities assessment.
Obtaining a Copy
Our Ferrari Consulting and Research Group Advisory Report– 2021 Predictions for Industry and Global Supply Chains is now available for complimentary downloading with our Research Center. Readers can obtain a complete copy by providing some basic registration information.
In our next posting in our 2021 Predictions series, we will highlight Prediction Two- Discernable Acceleration of Supply Chain Digital Transformation Initiatives.
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