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An agile supply chain in a changing worldAs long as there have been supply chains, risk management has been a challenge. Due to the interdependency of all its links, even a small problem in one isolated region has the capacity to compromise an entire global supply chain. So, when major worldwide trends and events take place, the potential for widespread supply chain disruption is enormous. The pandemic illustrated this fact in an unprecedented fashion with the knock-on effects of labor shortages and inventory depletion predicted to carry on well into the foreseeable future. Other recent factors that are having extremely disruptive effects on traditional supply chain practices include the rapid rate of change in consumer behaviors – and a highly unpredictable trade and political climate. In the past 10 years, e-commerce spending has tripled, and in the first seven months of 2020, there was a 149% rise in online shopping from the previous year. With the growth of e-commerce, there has also been a rise in consumer demand for delivery speed and personalized shopping experiences. The Amazon Effect refers to the increasing expectation for next-day delivery and how that has impacted businesses and logistics networks. In order to be resilient enough to adapt to these growing demands, supply chain managers have had to make rapid and significant changes to their logistics and warehousing networks and find ways to work with increasing numbers of third-party fulfilment partners. Even before the repercussions of COVID-19, U.S. businesses were striving to reduce their dependency upon overseas manufacturers and suppliers. By 2019, foreign tariffs and overseas trade policies had become increasingly unpredictable and businesses were looking for technological solutions to make their supply chains more self-reliant and resilient. Integrating digital transformation and Industry 4.0 technologies into supply chain operations is becoming a growing priority for global business leaders. Inflation and supply chain resilienceIn a recent survey of more than 100 freight, supply chain, and logistics businesses, 92% of respondents said that the inflation problem was a major concern and was having an effect on their businesses. Many of the global issues that led to supply chain disruptions – including labor shortages, inventory scarcity, and political uncertainty – are some the very same forces that are driving inflation. Unsurprisingly, the best businesses are finding that continuous and integrated supply chain planning is their best defense against uncertainty. With technologies that combat inflation, companies can see around corners, adjust their plans in real time, and build the resilience they need to adapt to rising prices and constantly changing consumer demands. How does supply chain resilience work?Good supply chain management means being able to respond quickly to operational disruptions and having a flexible contingency plan in place. But to be truly resilient, a supply chain must be able to forecast and anticipate disruptions, and, in many cases, avoid them altogether. In 2019, PWC commented on the importance of supply chain resilience, saying, “It’s not just about playing defense – it’s also about playing offense – finding competitive advantage by shaping a supply chain resilience strategy focused on disruption avoidance.”
Planning for a resilient supply chain See how supply chain planning helps avoid disruptions without limiting growth. Top three benefits of a resilient supply chainIn an increasingly competitive market, finding a profitable balance between supply and demand is a major challenge for every supply chain manager. Many companies that cut corners on diversification, supply chain technologies, and other resilience measures have recently been finding out the true cost of those decisions. But when companies invest in diversification, supply chain technologies, and other resilience measures, there are many potential business benefits, including:
Supply chain 4.0 technologiesDigital transformation and modern supply chain technologies give businesses the resilience and competitive edge they need to respond quickly – to both disruptions and opportunities.
Explore SAP Integrated Business Planning Ensure continuity in times of disruption with supply chain planning software. SAP Insights NewsletterFurther readingWhich supply chain planning function determines how much product is needed to satisfy all customer demands?One of the most important supply chain planning functions is demand planning, which determines how much product a business needs to make to satisfy all of its customers' demands.
What software modules deal with setting employee objectives performance and compensation?Employee relationship management software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training.
Which of the following slogans refers to the difference between push and pull based models?The difference between push- and pull-based models is summarized by the slogan “Make what we sell, not sell what we make.”
Which of the following best describes supply chain planning systems?Which of the following best describes supply chain planning systems? Supply chain planning systems enable the firm to model its existing supply chain, generate demand forecasts for products, and develop optimal sourcing and manufacturing plans.
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