Welcome to 2022 and let us all hope it will be better than 2021.
Once again, we will be taking you on a journey through the Enchange Supply Chain House providing guidance on what you need for your supply chain to improve and ultimately, achieve excellence.
Previous Top 10 Resolutions articles have focussed on activities and initiatives which are perfectly sensible to pursue at any time. However, the COVID-induced disruption of the last 2 years has brought supply chains firmly into focus and rightly so. You can and should follow some generic initiatives as you will see below, but the virus prompts us to look at our supply chains in a different perspective. Supply chain employees always knew the function was important but now a far wider group of people are interested having been adversely impacted by supply challenges in 2021.
Sadly, some businesses will not recover from COVID pressures and those fortunate to survive by the skin of their teeth would be wise to take a step back and do things differently and quickly or they too will soon be left behind. Every crisis provides opportunities but is your company willing and able to take that advantage?
Top 10 Activities, Resolutions or goals - you choose!
Across the world, people will be making personal and business promises they would like to keep but few will have the staying power and resources to make sustainable changes. How will your supply chain operate under the new normal of 2022 and beyond?
With this in mind, here is a Top Ten list of Supply Chain related activities to help your business improve in 2022. How many could make a difference for you?
- Do people matter? People have kept supply chains working despite the turmoil of the last 2 years but how long can they keep this up? You should pay attention to the mental strain COVID has brought including the real fear of job loss in many cases. What motivational flexibility can you offer in office schedules and work from home opportunities, etc? Free coffee and the foosball table in the canteen are no longer relevant perks for many, so reward and recognition will require a review at least and a likely revamp.
- Supply Chain Structure. Is your supply chain structure ‘off the peg’ or carefully defined for your actual situation? You will find numerous supply chain organisations on the internet and in publications but you should avoid a one size fits all approach. Your specific culture, needs, challenges and ways of working will dictate the structure that is right for you. What was a perfect fit in 2018 may not be applicable in today’s COVID world.
- Supply Chain Skills. Frequently forgotten in annual plan budgeting and often the first training to be cut when the expected top/bottom line numbers do not appear. Supply chain is a real discipline and requires employees to have appropriate skills to operate effectively. The function can no longer be the default destination for those who do not fit in elsewhere. A programme of training is imperative to ensure employee skills are brought up to basic levels at least AND maintained as the business environment develops dynamically.
- Sales & Operational Planning. From personal experience I know S&OP has kept businesses afloat in 2021. S&OP provides a process and structure that allows you to be in control as far as is possible under any circumstances and provides data and information to enable you to ride out crises. If S&OP is in place, improve! If there is no S&OP, implement it - it works!
- Data & Information. As ever, avoid uncontrolled spreadsheets like the plague as they undermine your business, wasting time and effort. If you have invested sensibly in an ERP then ensure it reflects your processes, is correctly implemented and you apply strict transactional discipline. Is your business running on masses of dizzying data or on valuable, actionable information?
- SKU Range Complexity. Do you know how many SKUs you have and the impact on your business particularly in times of crisis? Do you have more now than when you entered 2021, yet lower overall turnover? Check now and act decisively on non-profitable SKUs and ensure scarce resources are placed behind winners. In times of crisis you need your people, processes and facilities focussed on what provides a real return and not on a marketing whim.
- Appropriate Inventory. Following on from resolution 6. The stop-start nature of business in 2021 will have generated higher levels of slow moving, close to expire and expired stock. (Also, some year-end loading may well have occurred…….!) The start of the year is a perfect time to remove slow/non-moving stock which will otherwise hit the bottom line in write offs. Why not give your sales a much needed post-holiday sales boost with some low cost marketing support using stock that will be otherwise written off? You can hide the value of this stock in all sorts of accounting lines but eventually it will bite you on the backside if you do nothing.
- Living 3PLP Partnerships. Are your 3PLP partners considered to be an extended part of your supply chain or a necessary evil? If performance is not what you expect then perhaps you need to review the Service Level Agreements and revise the measures. If you are constantly complaining about 3PLP service then maybe you should look internally at what you ask of your partner. When you have seamless processes and a proactive relationship with 3PLPs, mutual success is far more likely.
- Real Customer Service. Companies that value their precious clients and customers in time of crises promote loyalty and are always more successful. You remember those that went the extra mile to deliver you a service or product. Do you measure Customer Service as a tool for improvement or as a stick to hit the S&OP team? Is the performance measurement 100% honest and accurate? Companies that fool themselves on Customer Service may see short term internal feel-good benefits but never succeed in the long run.
- Continuously Improve. If COVID has told us anything about business it is that you stand still at your peril. Doing things the same way as you always have done will see you at the back of the pack or worse, dead at the side of the road. You must keep innovating and improving your extended supply chain processes and people to maintain freshness, agility and competitiveness.
With so much going on both under and outside your control, you cannot do everything at once but if you focus on a few of these areas you can significantly change the chance of business stability and success by securing improved and sustainable value from your supply chain. As a priority, you must make your supply chain processes and people more resilient to the inevitable crises and unexpected challenges.
One certainty is that crises and challenges will come!
What to do next?
Finally, feel free to use any of our contact routes including Live Chat, if you have any questions about how the Enchange Supply Chain House can assist your journey to supply chain excellence.