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Is your supply chain sensitive to risk and opportunity?

 
July 27, 2016

The ultimate test of a Is your supply chain sensitive to risk and opportunity?resilient supply chain maybe its ability to cope with unexpected black swan events. However, the real value of a supply chain lies in its ability to react to small, frequent changes in customer expectations and demands, supply constraints, market variability, and competitor moves. Being sensitive to daily systematic risks and opportunities allows an organization to gain an edge in the market and capitalize on new and exciting commercial opportunities. A responsive enterprise will use its supply chain to create value rather than merely mitigate risk.

Amazons book division, for example, caters to casual readers as well as students and professionals but it doesnt have separate warehouses and trucks for each customer segment. Amazons supply chain is engineered to respond to different customers based on how long theyre willing to wait and how much theyre willing to pay.

ReadReinventing the Supply Chain for a Digital Worldin our consulting journal Perspectives to explore the new definition of supply chain resiliency, and understand the tactical goals that your organization needs to achieve.

To gain competitive advantage, you need to ensure that your supply chain is equipped to:

  1. Make informed decisions using the available data
  2. Foresee opportunities and take proactive decisions rather than make reactive choices
  3. Deploy available operational capacity without incurring incremental capital costs
  4. Interpret granular customer data at least as well as your competitors, if not better
  5. Provide more time for analysis and idea generation instead of data collection and preparation

Youll be off to a good start if you focus on managing supply chain data more precisely and more frequently. Try to strengthen your data by tapping into IoT streams, and use the best available simulation technologies and advanced analytics. Doing so will give you access to the most appropriate sets of granular customer data and help you save time on collection and analysis of that data.

A focus on granularity cannot be emphasized enough and can spark innovations that have the power to exponentially grow your business. For example, HP Instant Ink places sensors inside printers, allowing the company to estimate when the customer will run out of ink and ship new supplies in time.

Possibly the biggest hurdle to achieving responsiveness in supply chain management is not technological but talent related. Business leaders are finding it increasingly hard to find supply chain professionals with deep company knowledge and appropriate analytical skills. To compound the problem, in some industries, many employees with company knowledge are approaching retirement age. To effectively overcome this challenge, train your staff and institute effective mentoring programs to maintain a team of competent supply chain executives. Also, take advantage of new technologies like machine learning to reduce dependence on supply chain professionals.

Building a cutting-edge supply chain is not an overnight task. It requires investment in resources, the guidance of senior leaders and the support of staff but the rewards are significant. Black swan events are rare. Using unlikely events as a principle for building a resilient supply chain is to miss the opportunities that come from being able to respond to small disruptions with skill, speed, and flexibility.

I encourage you to maintain agility in your business and supply chain to meet the changing needs of your customers and achieve business goals.I look forward to your comments and questions here and encourage you to schedule time to meet with ourour TCS SCM team at Oracle OpenWorld, September 18-22, to discuss innovations in supply chain management.

The author wishes to thank Raja Chandrashekarin the preparation of this blog.

Raja Chandrashekar is responsible for driving TCS’supply chain management innovation, and transformation for TCS clients across the Electronics value chain spanning Hi-tech, Media, Telecom and Medical Electronics. In his role as Director, Supply Chain Center of Excellence, Raja helps companies define and devise supply chain strategies needed to drive breakthrough supply chain performance. Rajas 16+ years of supply chain management experience involves designing, developing and implementing successful business solutions across a variety of industries.

Pari Annamalai is the Senior Director of Supply Chain at Tata Consultancy Services. He has over two decades of experience working with leading logistics, shipping, manufacturing, retail and distribution companies throughout Asia and North America on complex supply chain improvements. Pari has proven himself as an accomplished leader offering diversified leadership experience spanning supply chain management, engineering, operations and general management across various industries. Prior to joining TCS, Pari was the Vice President of Industries & Presales in APAC for JDA Software Asia.