Building the Perfect Supply Chain Strategy for 2022January 18 2022
As the year 2022 begins, companies start to swiftly implement their new supply chain strategy, hopeful and motivated to leave 2021 and its chaos behind and start with a clean slate. Even though this sounds promising, not everything should be forgotten. Companies must leverage the lessons learned and consider the inefficiencies brought to light within the entire process to create a resilient supply chain strategy for 2022.
We are all familiar with the term disruption by now, and we most definitely know that it will continue during 2022. As the effects of the pandemic (driver shortages, inflation, delays, increased costs, labor shortages, and high demands) continue to test the resiliency of most businesses, we are more than confident that we’ll be able to create processes that can handle disruptions and thrive.
Is a supply chain strategy necessary?
Even though the answer to this question may sound obvious, it’s essential to consider the importance of a strategy, especially during critical times.?
Therefore, a robust supply chain strategy is vital?for the following reasons:
- When you plan, you are prepared.
- The world has shifted, and you need to be able to shift with it.?
- With a strategy, you’ll ensure your business adapts.
- You’ll be able to foresee possible obstacles.
- You’ll focus on tackling your business’ pain points.?
So, with the above in mind, how will businesses create a supply chain strategy that considers the correct elements and succeeds during these challenging times?
Creating a perfect supply chain strategy
Let’s talk about the essential elements you must consider when creating your business’ supply chain strategy:
1. Embrace disruption
Consumer behavior and the entire supply chain dynamic have completely shifted during these past years and the new normality is here to stay. Therefore, companies must understand that disruption is not something of the past, but will continue during 2022.
Instead of thinking that everything will go back to normal in no time, companies must find ways to work with the disruption by creating new strategies that consider the lessons learned during 2021. Resiliency, agility, visibility and reliability are just some of the must-haves for your plan. Without them, you’ll be stuck in the past allowing your competitors to take the lead.
Additionally, as mentioned before, the pandemic allowed the industry to see its flaws. Knowing our own industry’s gaps will enable us to create tactics that tackle each of them, creating a better and more efficient supply chain that’ll benefit consumers worldwide.
2. Risk mitigation as a pillar
Although most companies have their risk mitigation strategies in place, in many cases, they’re not a pillar part of the overall business strategy, which at the end of the day, becomes a significant setback. Finding efficient ways to mitigate risks will keep your business from experiencing major loss during times of crisis. Even though there are some risks that we can’t foresee, we can use historical data to predict possible outcomes and find ways for your business to maneuver between them.
Considering our current supply chain disruption, companies need to assess and identify possible risks that may affect the business’ performance. Once identified and prioritized, you’ll be able to create risk mitigation plans tailored to each specific risk.
In 2022, risk mitigation is critical. Understand your business and the current situation so you can create holistic plans that benefit your company in difficult times.
3. Resource optimization
Analyzing your yearly performance will allow you to understand your company’s gaps and find ways to fill them with efficient strategies. One essential tactic this year is to optimize wherever you can, especially with your company’s resources.
Going through your company’s financial data will let you know exactly where your money was spent and where it must be spent this year. Without knowing it, you could’ve been spending resources inefficiently. But now, considering the data you’ve gathered, you’ll be able to optimize your resource spend and direct it to the areas that need improvement.
4. Strategic partners
It’s no secret that to pave your way to success, you’ll need strategic alliances with well-known and experienced partner companies within the industry. Accessing a broader list of companies to help your process flow smoother will allow you to have options and alternatives when things get tight.
Having these trusted partners on your side will give you the agility and flexibility you need to get through challenging times providing high-quality and timely services without significant setbacks.
Companies with technology at the forefront of their operations that use new software and are constantly up to date with industry trends are the ones that will help your business thrive. You’ll gain access to your partners’ capabilities, systems and other requirements at a much lower cost.
5. Taking technology to higher levels
Technology will continue to be a significant player within the transportation and logistics industry. But this year, it’s not just about implementing a TMS in your operation. It’s more about diving into AI, machine learning, predictive analytics and other more advanced digital enablers. These more complex technologies will provide your business with visibility, real-time information, and data-driven decision-making.
By implementing these technologies into your operation, you’ll be able to access a higher level of visibility, allowing you to become more responsive whenever there are obstacles along the way. This real-time visibility will enable you to make better decisions, but it also allows your customers to see their shipment and know when it’ll arrive, improving their overall customer experience.
Additionally, real-time data will provide complete transparency, control costs, oversee performance, find gaps efficiently and boost overall productivity.
When creating a perfect supply chain strategy, a crucial aspect to consider is your workforce. It’s essential to understand that your consumers have changed and your workforce has changed as well. Due to the pandemic, the labor market started to shift. Remote work became the norm, and most people adapted to the new way of work. Once the threat decreased, companies began to require their employees back in their offices and warehouses, but they didn’t want to go back. Therefore, many people demanded more flexible work schedules, or in many cases, they just quit.
We currently lack qualified employees to take care of tasks that most people do not want to do. Therefore, it’s essential to find more attractive ways to recruit newer generations with other priorities and who do not want a 9 to 5 job at an office. Hence, finding alternatives to counteract the hiring shortage is essential.
Another critical element is the qualifications of your employees. Nowadays, as most businesses incorporate technology, your employees must be qualified to handle the physical work and manage the tech software you implement in your company.
Keep in mind these six elements when creating your supply chain strategy and you’ll be able to stay ahead of the game, create efficient workflows, and access long-term solutions based on data and lessons learned from the past few years.
At Kingsgate, we are a tech-driven company that leverages experience to provide high-quality services for top companies within the transportation and logistics industry. Through our years of experience, we provide a strategic alliance that will boost your business’ productivity and leads the way to success.
Contact us, and let’s create the perfect supply chain strategy for 2022 together!
All the Best,