This is a glorious time for the supply chain. We have technical capabilities at our fingertips that our predecessors never dreamt of having. Robotisation and automation are contributing to a supply chain productivity never seen before, Big Data and predictive analytics are helping us to understand the world much better, and Artificial Intelligence is starting to show its full potential. All these ingredients are the perfect mix for us to be facing the best moment in the history of the supply chain. Isn’t that so?
Well, the harsh reality is that it is not. You don’t need to be a market expert to know that many large companies have suffered significant devaluations in their share price due to supply chain issues. So, the million-dollar question is: If we have so much good technology, why do we have so many supply chain problems?
In fact, there is no single answer.
The context in which the supply chain operates today
While technology has evolved a great deal in recent years, the context in which the supply chain operates has also changed a lot. In this respect, there are four points worth highlighting:
Constantly evolving customer expectations
Customers now interact with brands across multiple platforms. In today’s world, offline and online realities coexist, and customers want a seamless experience across different touchpoints to interact with the company wherever, whenever and on whatever device they choose. In addition, people now make their purchasing decisions based on how closely companies share their own values, particularly around sustainability and diversity.
Traditionally, businesses specialised in either the manufacturing, distribution or retailing of products. Now, hundreds of brands do all three. The nodes of inventory positioning and order fulfilment have multiplied to provide an omnichannel customer experience. This means that customer touchpoints are multiplying, and so is complexity.
The emergence of social commerce
Today’s social networks are where trends begin. To meet customer expectations, highly personalised products, with short life cycles and the notion of exclusivity, must be offered, resulting in complex assortments.
Disruption is the new normal
This is perhaps the element of the global context affecting the supply chain we are all most aware of. Energy and commodity prices are volatile, political unrest is on the rise, interest rates are soaring, currencies are fluctuating. All of these difficulties have a profound effect on the supply chain.