Current supply chain disruptions, since Covid-19 pandemic, have been adding pressure to the sector, which has been forced to tackle disturbances, manage risk mitigation and increase resilience.
Efforts seem to prove the way in the past two years, based mainly on bigger buffers and safety stocks, but taking into consideration dual sourcing and regionalization or near-shoring as smarter ways to handle network resilience.
From an operational perspective, supply chain planning has also reached unseen volatility. And even though actions are still needed, key leaders point out end-to-end visibility, implementation of scenario planning and master-quality data as the three pillars for resilient supply chain planning.
Digitalization investments had been made regarding visibility, and awareness through the upstream levels has been gained at a certain level. Therefore, upcoming digital priorities will focus on managing supply and demand planning and deploying inventory optimization.
Nevertheless, talent acquisition still jeopardizes most companies. If the approach in the past relied on reskilling personnel, the lifting of worldwide restrictions has enabled mobility and increased enterprises’ eagerness for outside hiring.
“High-quality data was associated with lower levels of recent supply chain disruption, although the effect was less pronounced than with visibility or scenario planning.”
The main inputs and contributions are:
- Companies are shifting their focus from visibility to improvements in demand and supply planning. Proving digitization efforts are entering a new phase, as 74% of participants agreed in investing in digital technologies for demand planning.
- Bigger buffers and safety stocks are still seen as an important tool for supply chain resilience. 80% of respondents have increased their inventories during 2021.
- Despite the fact of overall stock levels trend, companies are turning their views towards smarter ways to ensure resilience. Indeed, 71% of respondents expect to revise their inventory policies in 2022 and beyond.
- Supply chain planning can be gained based on end-to-end visibility, the implementation of scenario planning and on sufficient or enough mater-data quality. Visibility is the are with greatest progress, since almost 70% of companies have implemented digital dashboards for supply chain visibility. Robust scenario planning, however, still hasn’t been spread across companies, with only 37% saying they counted with proper tools. In addition, just over half of the companies declared the quality of the data in their supply chain planning systems was sufficient or high.
- These three pillars have been of value given the fact that companies that hadn’t applied them were twice as likely to encounter supply chain disruption problems.
- Digitalization investments and technological development continues in the agenda. More than 90% of participants had invested in digital supply chain technologies in the past year.
- However, understanding the status of complex, multitier supply chains is still proving extremely challenging. Forty-five percent of respondents have no visibility into their upstream supply chain or that they can see only as far as their first-tier suppliers.
- An acute shortage of talent is holding organizations back in their efforts to accelerate digitization and implement advanced planning systems. Only 20% of participants stated that they could meet the requirements needed.
- 68% of companies were interested in outside hiring as their top priority to deal with talent acquisitions instead of reskilling, which had been in the past the main action.
“As companies address their visibility issues, digitization efforts are shifting to the next big challenge in supply chain management: capturing the demand signal.”