Don’t Let Demand Run Away from Your Supply

Over the past few years, companies across all industries have taken extreme measures to manage the financial pressures and risks of uncertain economic times. Our professional consulting personally observed many companies taking cost-cutting actions that were absolutely necessarily to ensure short-term business sustainability. However, these same actions are now coming into question with a brighter future on the business horizon.

As we emerge from a down trend, the supply chain decisions of the past are presenting new sustainability challenges. Many organizations in the late 00’s targeted the immediate value of inventory reduction as one of several stay-in-business strategies; however, these now extremely lean supply chains are now struggling to keep up with a rebounding consumer demand. This has many procurement professionals wondering:

•    Did the economically driven business actions over the past two years permanently affect the future health of our supply chains?

•    How long will it take for our critical supply paths to be re-energized?

•    Will current supply levels be able to keep up with our growing consumer demand?

•    Should we commit to a positive future with a fully operational supply chain?

In a growth environment, the tendency is to focus on keeping up with demand, neglecting work to improve supply. The lessons learned from the recent downturn may be shifting additional business focus to supply.   Our professional consulting views the coming financial recovery as a platform for more sustainable supply chain management. We find many organizations working to:

•    Incorporate strategies that will reduce process and transaction inefficiencies.

•    Integrate management system to enable sustainability as a key component of supply chain management.

•    Engage supply chain stakeholders to bring closer alignment on business sustainability metrics.

A trademark of sustainable organizations is the ability to effectively manage the flow of information among key business stakeholder relationships. Through collaborative stakeholder engagement in the supply chain, companies can create business sustainability alignment and ensure the most effective results.