The online shopping ecosystem has ballooned to encompass an ever wider variety of channels, technologies, and payment methods. Looking at the future of supply chain optimisation, a business must be alert to the emerging trends. PHOTO / Michael Kakumirizi


Strategies for forming resilient supply chains

What you need to know:

A good understanding of the product, its demand in terms of quantity, seasonality and locations is critical to supply chain planning and optimisation.

 A competitive business in delivering customer satisfaction should adapt certain strategies to increase its supply chain efficiency.

This requires coordinating and integrating various components of a supply chain to maximise benefits. Here are a few ideas that a business can implement to increase efficiency of its supply chain.

Any optimisation strategy anchors on unwavering focus on operational acceleration and cost reduction – This should be the driver of any optimisation agenda. A business wants to be responsive to market signals and do that in the most cost-efficient manner. 

A supply chain optimisation initiative that does not have cost reduction and operational efficiency at its core is futile and is less likely to achieve ultimate goals of enhanced customer satisfaction and profitability.

Demand-driven planning
The business must focus on demand-driven planning. While this is normally so difficult to achieve in many businesses, effective planning informed by accurate data on the level of demand, seasonality, and geographic distribution of demand for the product is a critical strategy for optimisation.

Without some degree of certainty about the nature of demand for the product, it is almost impossible to estimate how much input is required, the timelines, nor locations where the product must be delivered. 

A good understanding of the product, its demand in terms of quantity, seasonality and locations (among other factors) is critical to supply chain planning and optimisation.

Improving communication and collaboration with other players should be a constant endeavour. The flow of information between the various partners in the supply chain must be effectively managed. 

All stages of the supply chain need to be aware of what is happening and must receive the right or appropriate information they require to make plans and decisions. 

Collaboration is required in not only planning, but also ensuring that the different resources such as transportation and logistics are coordinated to avoid wastage and delays.

Beyond collaboration, establishing a strong alliance with your supply chain partners makes a big difference. No business operates as a lone ranger. Its supply chain depends a lot on the actions and inaction of others. 

Hence coordination and collaboration with other players is key. Efficient supply chain management recognises the value of those other players and aims to build an alliance where all participants can feel they have a stake. It must be a win-win alliance rather than one that is skewed to disadvantage others. 

Quick decision making
Forward looking businesses deploy appropriate technologies to support visibility and on-time decision making. With ICT, digital technologies and Artificial Intelligence (AI), a business keen to improve the efficiency of its supply chain can utilise available technologies enhance information visibility, but also enhance decision making among its supply chain participants. There is more value in deploying a technology that can easily integrate others in a seamless manner. 

The aim of such technologies should be to improve supply chain visibility and responsiveness. Technologies such as advanced data analytics, real-time tracking systems, automated inventory management, machine learning, and robotics are some technologies that come in handy in optimising supply chains. 

Such technologies can improve accuracy in forecasting and inventory management and reduce operational costs. In addition, the use of cloud-based platforms and digital solutions can improve supply chain visibility and enable real-time collaboration among different stakeholders. 

A business must strive at all times to adapt lean manufacturing and continuous process improvement in its strategies. This will enable it to eliminate waste, while continuous improvement will enhance its ability to predict and respond to bottlenecks while eliminating inefficiencies in the system.

While the above strategies will enhance business competitiveness, challenges abound. Accurately predicting customer demand and matching it with the supply, global trade and finance complexities, the ever-changing customer expectations, shocks and stresses caused by pandemics and climate change; the intricacies of building functional and productive alliances with others, are but a few of the daunting challenges a business has to contend with in optimisation.

Looking at the future of supply chain optimisation, a business must be alert to the emerging trends.

Worldwide, consumer preferences are fast moving towards products that are sustainably produced. These are products whose production and distribution processes take into consideration and mitigate potential negative environmental and social impact while maximising the benefits. 

Integrating sustainable practices into the business supply chain optimisation efforts will increasingly become a key differentiator and a competitive advantage.

A business can implement eco-friendly initiatives such as reducing the amount of carbon produced during production and distribution, and implement green packaging solutions, both as strategies to reduce their environmental impact. 

A business that sources their raw materials, produces and distributes their products in an ethical and socially responsible manner by adopting fair labour practices, avoiding child labour and undue exploitation is more likely to be more competitive going forward. This will be particularly pivotal to business who have global supply chains.

The future of supply chain optimisation lies in the integration of emerging technologies such as blockchain, Internet of Things, and big data analytics. 

With the help of blockchain technology, organisations can enhance supply chain transparency and traceability, ensuring that products are sourced ethically and delivered to customers with complete integrity. 

This optimisation process is particularly important in today’s uncertain business landscape, where factors such as random customer demand, and economic and environmental shocks can impact the performance of the supply chain. 

Businesses will need supply chains that are more agile and responsive and can quickly adapt to changing market conditions, meet customer expectations, and achieve a competitive edge in the industry. This calls for businesses to combine optimisation with effective adaptive management techniques throughout the organisation.


The writer is a sustainability enthusiast.