Navigating Supply Chain Shortages: Strategies for Enhancing Collaboration and Managing Risks
The current supply chain shortages are causing significant concern for supply chain leaders as they struggle to find resources to make products. In addition, traditional efforts to improve forecast accuracy are not yielding substantial results, driving increased urgency to resolve material constraints. In light of this, supply chain planning leaders need to orchestrate the value chain to enhance supply recovery efforts.
According to the Gartner Supply Chain, 78% of respondents cite finding resources to make products as one of the most critical scarcities for their supply chain. This is compounded by the fact that procurement and suppliers receive significant changes to demand plans within their response time. Furthermore, the 2020 Gartner Opportunity After Crisis Survey notes that 64% of organizations anticipate customers' unexpected demand variation to increase over the next five years.
Working collaboratively between planning, procurement, and supply and inventory planning is essential to overcome supply chain constraints, given the depth and duration of current shortages. The 2019 Gartner Supply and Inventory Planning and Challenges Survey found that 69% of respondents found the level of collaboration and alignment between the supply and inventory planning and procurement functions to be very high, while 67% reported similar alignment with demand planning.
To successfully tackle supply chain shortages, supply chain planning leaders need to bridge the short-term supply gap by focusing on win-win opportunities, such as swaps and trades, or substitutions and steering when meeting with suppliers. It is also crucial to manage minimum order quantity (MOQ) risk to avoid further shortages. To ensure a common interpretation of the demand plan, a stagger chart can help align supply planning, procurement, and key suppliers.
In conclusion, supply chain planning leaders must bridge the short-term supply gap by focusing on win-win opportunities and managing MOQ risks. Using a stagger chart can also help align all parties involved in understanding the demand plan. If you’re struggling with mitigating your own organization's supply chain shortages, contact Critical Risk Solutions for assistance in developing strategies tailored to your specific needs. With our experienced team of professionals, we will work with you every step of the way so that your business can thrive despite any challenges posed by today's complex global markets.
