Supply chain uncertainty: How to be more flexible?

“Both internally and externally, companies are facing growing uncertainty”, says André Vriens, managing partner and senior consultant at EyeOn. “Consumer demand has become even more volatile, and in addition there is increasing uncertainty in the supply chain.” Organizations that want to keep or regain control should establish end-to-end transparency. “How can I be more flexible in times of increasing supply chain uncertainty?”

Good to know: We also address this topic in our upcoming webinar ‘Flexible supply chain planning in times of uncertainty’. Sign up now!

“If you look at the past few years, there are two developments that organizations have to deal with: For one, Covid-19 has made consumer demand more volatile and uncertain than ever before. Three or four years ago, organizations were already experiencing changes, but it often happened step by step. Volatility has now taken on a whole new dimension,” says André Vriens.

uncertaintyUncertainty in the supply chain

“Furthermore, we see that the uncertainty on the supply side has also increased enormously in the past year and even more so in recent months. Due to developments in the market, raw materials are no longer reliably available, organizations are faced with price increases or are struggling, for example, with finding containers. That has to do with the war in Ukraine, but events like the blockade in the Suez Canal or a strike in a port also have an impact.”

End-to-end insight into the supply chain

“The first step that organizations can take to meet these challenges is to gain insights”, says Vriens. “What is the biggest challenge for your company? And what happens there? We call that end-to-end insights. Try to understand the consequences of the volatility of demand for your organization and your supply chain. How can I be more flexible and agile, when supply becomes unpredictable?”

There are several possible solutions, explains Vriens: “For example, if you have parts produced in Asia and goods do not arrive on time, should I operate closer to home? Or do I need to create buffers? Or do I have to make other agreements with supply chain partners? By creating end-to-end transparency, you understand whether your current supply chain setup is still smart.”

Developing scenarios on how to manage the supply chain

The second step in finding solutions is to connect your forecast and planning with the insights you gained in step two. “How do you ensure the best possible forecast? We know that it is not completely accurate anyway, but it does allow you to create scenarios on how you could manage your supply chain. How can you take the uncertainties into account as best as possible?”

Advanced models can help you overcome your challenges, but implementing a model or system alone is not the answer. The idea that good people who can work well with Excel are the solution is also outdated, says Vriens. “And you cannot expect a system to be able to calculate the correct scenarios if the basic data is not in order or incomplete.”

Knowledge and experience in forecasting and planning

To help organizations with these challenges, EyeOn offers knowledge and experience in the field of forecasting and planning, says Vriens. “We help companies with end-to-end transparency, creating a roadmap for digitalization, developing models, and developing capabilities. We help people grow their knowledge by facilitating master classes, for example.”

Vriens is positive about the coming year: “The field is becoming increasingly important and is also receiving more and more attention from C-level. In addition, you see that organizations are increasingly focusing on how they can extract more value from data. Especially now that the labor market is under tension, it is good to see how data can help you. It is therefore not without reason that more than a third of our organization consists of data scientists.”

Want to learn more about this topic? Join our free webinar on July 14: ‘Flexible supply chain planning in times of uncertainty’!

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