Most times, goods can be produced by a combination of different methods. Companies must decide whether they will outsource manufacturing. This operations planning is essential because these decisions influence the supply chain. Planning also involves mapping out the network of manufacturing facilities and warehouses, determining the levels of production and specifying transportation flows between sites. It also involves assessing how to improve the global supply chain and its management processes.
One common and very effective model is the Supply Chain Operations Reference (SCOR) model, developed by the Supply Chain Council to enable managers to address, improve and communicate supply chain management practices effectively.
The SCOR model runs through five supply chain stages: Plan, Source, Make, Deliver, Return
In the past, the priority in any supply chain was to minimize waste to deliver products as fast as possible. However, the COVID-19 pandemic prompted supply chain leaders to shift their focus from efficiency to resilience to withstand global volatility.
Increasing your supply chain’s resilience may not be particularly cost-effective in the short term, but it’s a risk many organizations are willing to take to ensure long-term profitability.
It’s almost impossible to predict what the next big threat will be, and that’s precisely why supply chain professionals are starting to turn away from the lean supply chain design that prevailed for decades.
Looking into the Future
A supply chain strategy shouldn’t just be focused on the present. Looking into the future is key for growth and scaling. Is important to review operational data every quarter and see if tracking future goals is still a possibility. A good way to start is by asking these simple questions:
- What economic or industry trends are emerging that could disrupt your sector or your business?
- Are there any technologies being developed or entering the market that could help give your company an advantage?
- Are you hitting your KPIs? If not, what measures you should be taking to complete this?
- Is your current 3PL network keeping up with your market demand?
Discover the answers to these questions and build a plan to proactively respond to trends that impact the supply chain. Create a plan to incorporate any necessary technology investments into your long-term plan so you’re prepared to compete as the landscape shifts.
There’s no such thing as a “risk-free” supply chain. The complexity of supply chains makes them inherently vulnerable to factors outside the organization’s control. However, incorporating the strategies above into a planning process can improve sustainability and minimize the impact of interference if, and when it happens.
The more consistent supply chain operations are, the more dependable they will be. This is especially true for organizations whose suppliers and manufacturers are scattered across the world.
Templates for platforms, products, and plants enable seamless production and adherence to compliance regulations. For example, companies in the automotive industry use common vehicle platforms to harmonize their supply chain strategy.
Promoting collaborative networks
The positive impact of one sustainable business on the environment can be multiplied through collaboration across all the businesses in the industry or even across industries. Businesses in the same industry can have shared supply chains. Collaboration among businesses on sustainability issues in supply chain management will promote the evolution of eco-friendly sustainability standards and processes.
Collaboration across industries helps in the recycling and repurposing of products after they have fulfilled their primary purpose. Repurposing discarded materials helps in recycling and promotes supply chain sustainability.
Establishing a successful supply chain is not a one-time activity. Benchmarks evolve, metrics need to be fine-tuned, training needs to be ongoing, and the entire process needs repeated iterations. Sustainable supply chains not only deliver environmental impact but also provide business impact by helping reduce operating costs.