There’s a common misconception that Christmas is the crucial period for supply chain planning, but if the last two years have taught us anything, it’s that threats to the supply chain don’t just occur at moments of high visibility.
This Christmas, teams are contending with postal strikes, an energy crisis, and financial uncertainty, but there’s nothing unusual in this collection of events. The potential for disruption is constant; it’s only the specifics of the landscape that shift. While some of them are certainly seasonal and regular, others seem to come out of the blue.
The reality is that Christmas is not such a landmark for supply chain teams as it’s perceived to be. Things are probably a little trickier this year, but if supply chain planners have been on the ball, they’ll already have anticipated the impact of demand uncertainty, strikes, and shortages that might cause logistics issues. And they’ll have recruited the essential seasonal labor with the skills and flexibility to meet the accompanying warehouse and transportation challenges.
However, the greater likelihood is that many have spent the last few years constantly firefighting. This puts them on the back foot and means they’re constantly reacting, rather than proactively planning for contingencies at scale. It’s a difficult cycle to break but developing competent skills and using knowledge to manage risk at every stage of supply chain planning can go a long way to avoiding disruption at such a critical time.
The good news is that existing methodologies can help to achieve the granular analysis that today’s supply chain managers really need. These include:
- Demand-Driven Material Requirements Planning (DDMRP). This technique preserves and manages the flow of parts and information through the creation of strategic inventory buffers, which act as shock absorbers to those unseen unknowns. A real-time holistic view of the supply chain is essential for efficient demand-driven planning. Having this view also enables short-notice change if stock is diverted, transportation routes become congested, or sources in a particular country become inaccessible.
- Failure Mode & Effects Analysis (FMEA). In essence, this is a method of sitting down and thinking about everything that could possibly go wrong. Applied to supply chain management, that means asking the right questions to analyze the risks, and knowing the status of every route and every supplier at any time. Using FMEA insight allows you to focus on the most critical elements of the chain, so that you can make Plan A, Plan B, and even Plan C in anticipation of any fluctuations in availability.
These are the kind of skills that a supply chain manager really needs in such a disrupted landscape. Investing in them will bring a dividend of improved communications and stronger and better-informed supplier relationships. Complete visibility is the only way to manage the multiple tiers of a complex supply chain. If you’re having to rely on a quick phone conversation with a supplier for an update when an alarm sounds, rectifying the issue in time will always be a challenge.
That’s why every supply chain manager should have FMEA, front-of-mind. It shouldn’t be about the likelihood or unlikelihood of supply chain disruption, because disruption is inevitable in some shape or form. Supply chain planning isn’t just for Christmas. We should now be building the skills and competencies that help us to plan as accurately as possible but more importantly know what we’ll do when it goes wrong before it goes wrong rather than being caught out by events throughout the year.
By the way, having a Plan B is also a guaranteed stress-buster! Stress-free supply chain management may not be completely possible – but with adequate planning, less stress is accessible.