Information Disruptions Supply Chain

How to integrate information to manage disruptions in the supply chain – 5 tricks

In the current disrupted world, getting information on time is a challenge. Collaborate across the different actors in the value chain is key at this point, and Supply Chain leaders should leverage their capabilities to obtain information that should be used to be integrated across the logistics ecosystem. The diversity in type of operations from company to company creates an additional challenge, however the world is more interconnected than ever, and information is key to avoid companies working in siloed-perspective instead into a collaborative approach. In this article we review 5 tricks to overcome disruptions thanks to ability to integrate information. For sure, coming back to our lives three years ago, nobody expected to have the level of disruption that we reached during the COVID-19 outbreak and the different consequences related. Exploring across many different industries, we can obtain a lot of lessons learned, but probably the most key one is the importance of the collaboration and communication across the supply chain to enhance resilience and reliability. Volatility in costs and inflation will make it even more complex, but the challenge will remain more and more difficult to predict in absence of information that should be key to provide effective problem- solving to practical issues that are appearing daily in our new reality. As well, communication is key to provide stakeholders sense of the reality face to the challenges, and to overcome the eternal issue of the siloed planning and execution around Supply Chain and Logistics.

1. Internal coordination, Predicting better the future in the supply plan ecosystem
In a stable world, future consumption prediction comes along the preparation and analysis of historical data, therefore many companies tend to share limited set of data to their suppliers. Considering the more modern view of the supply chain as a global end to end tier of suppliers and customers, this topic is becoming more and more important, because regular information interconnection and collaboration to share actual anticipated requirements, will certainly allow the entire chain to be more flexible and create a more realistic plan to answer faster to disruption. It is key to consider this collaboration a “fluent flow” instead of a one-off action. Ensuring continuity is key and therefore deserves a process set up to make it work properly. One of the key applications of this policy is the implementation of policies like VMI, where strong collaboration process with regular information sharing is critical for success. Technology is vital here to align both companies with inventory information and ongoing reply planning routines.

2. Collaborating with our customers: coordinating the operational challenges.
Same purpose should be applied to the collaboration with our customers. The intention must be to clarify, getting maximum information possible about Demand Plan. Building the same structure and discipline than the case of suppliers, in order to capture the flow to make information available will be key, specially in a Demand-Driven supply chain. We often receive many questions and consults on how to perform these actions to set up a continuous process to get information and the proper methodology will depend on the degree of collaboration with current customers, however it is absolutely key to start this collaboration path to manage disruption times. We need to overcome the old debate about the convenience or not to ask our customers. During this disruption, many companies have started to achieve a process to ensure constant communication. This information flow may continue in the future and will be enhanced.

3. Create Internal groups to manage capacity prediction
Once the collaboration with suppliers and customers is in place, we need to plan our internal capacity to provide answers to potential needed investments and personnel hiring. One of the tricks I have discovered in the last two years is that this level of practice and learning path is much easier to get from the experience and extended collaboration via cooperative efforts in the relation with external stakeholders but as well with our internal ones. Creating internal groups to manage capacity prediction leverage and working with models on the important events, may create the conditions to propose, trade off and accept internally a number of scenarios. One critical trick point is to arrange the needed agreements with internal stakeholders to get ready processes of allocation decision in case of shortages, avoiding this decision being converted in a case-by-case painful exercise that will become extraordinarily time consuming. 4.- Improving Quality or optimizing Quality?

The quality control is always a key factor in business relationship with our suppliers and customers. Managing correctly quality requirements in disruption times will need a set of different skills and trade offs than when managing our business in a stable world. Depending on the sector, when supply chain disturbances in raw materials and components comes, we need to question ourselves what degree of flexibility in the use of materials from different suppliers than the regular ones we will apply to our process. In the case that our regular suppliers are not able to supply, we need to be opened to additional sources and the qualification process and approval must be created and valid. The result should be a process to optimize quality with our suppliers that will result in an alignment of our perceived quality with the market according to expectations.

5. Backorder control. Sharing books with suppliers
One of the main questions around our operational activities with suppliers need to be if we are simply placing orders or instead we are correctly managing the open order book. As always, the devil loves to live in the details and it is really an important trick to avoid misunderstandings and a lot of time wasted in mails, calls and non-value added activities, to agree a process to share the information effectively and in a timely manner. In case of shortages, for instance, creating a shortages file to be reviewed constantly and with updated information. But another important key success factor is to share orderbooks frequently in case you don’t have shakehand interfaces communication, to avoid issues like duplicities, delayed information not captured properly. Clean these points that will create a lot of time-and-efforts to solve, will help your staff to dedicate to real value-added activities.