Supply Chain Disruption-as-a-Rule

The images are familiar: empty shelves, eye-watering prices, long lines, frustrated consumers. Once rare, these sights have become commonplace. In many cases, the consequence for consumers of this new age of unreliability is just exasperation. For manufacturers, retailers, and producers of consumer-packaged goods (CPG), the ramifications can be existential.

The reason is simple: If you are unable to reliably bring your wares to the market, you are no longer participating in it. That means lost customers and lost revenue — and, potentially, going out of business.

It is time to accept that supply chain disruption is no longer the exception — it is the rule. Faced with the devastating downsides of disruption-as-a-rule, manufacturers, retailers, and CPG producers need to fully embrace data science to alleviate their supply chain woes through data-driven resilience. That will require investment and rethinking your approach to supply chains.

Read on to learn more about why there is no way around this transformation, and how you can thrive in the age of disruption-as-a-rule.

Understanding the new climate

Not long ago, the forward march of globalization began producing highly complex supply chains. Manufacturers, retailers, and CPG producers began offshoring to make the most of comparative advantages in different countries to source labor and materials at lower prices — passing those savings onto consumers. Thanks to global stability, supply chain officers relied on three concepts to choreograph their operations:

Management by exception (MBE):	Business continuity plans (BCP):	Supply chain as a cost center (SCCC):
A set of best practices to deal with unforeseen problems on the assumption that they are deviations.	A document that lays out a contingency plan based on an assortment of catastrophic events that can be predicted.	A cost reduction practice reliant on tools such as Excel spreadsheets and local dashboards to reactively manage processes.

Yet after decades of stability, the confluence of geopolitical conflicts, border closings, and infrastructural failures have made disruption more common than regularity. Not only do the disruptions outnumber the regularities, but they are also so far beyond the pale that most business leaders fail to see them coming. While BCPs, MBE, and SCCC made sense in a world with predictable business parameters, we no longer live in that world.

The consequences of not adapting

Logistical uncertainty has escalated. The potential for supply chain instability will only continue to grow. For unprepared companies that will result in increased costs of delivering their products and delays in reaching consumers. Fatally, it could even mean the inability to go to market at all.

With such a dire situation, it is surprising that manufacturers, retailers, and CPG producers have not jumped on every opportunity to upgrade their supply chain management to confront disruption-as-a-rule. Three key blockers explain the lack of progress:

Outdated systems	Discontinuity and complexity	IT talent gap
Most supply chain management is still done manually by Excel spreadsheets and has not adapted to digitization.	Supply chain logistics rely on massive networks of distributed assets that are siloed and operated independently.	Over half of supply chain professions are facing a talent shortage and see it as one of their top five challenges.

Taken together, these frictions place manufacturers, retailers, and CPG producers in a bind. They lack the visibility they need to adapt their supply chains to the new climate. They must upgrade their data management systems to gain visibility over complicated supply chains but lack the expertise to do it themselves. So, they are seemingly stuck with BCPs, MBE, and SCCC — crippling their efforts to adapt and leaving them exposed to devastating disruptions.

Growing toward supply chain maturity

To overcome this impasse, you need to think strategically about how to develop a new approach to supply chain management. The way forward lies in developing data capabilities to drive deeper insight into the status of your supply chain and anticipate problems. By using advanced data techniques, you can develop the transparency and resilience you need to stave off catastrophic supply chain disruptions.

Clearly, you will not be able to overhaul your entire IT infrastructure at once. Developing data maturity takes time and prudence to move beyond reactive and siloed management. The steps you can take depend on the data maturity of your supply chain, which is divided into four stages:

• Functional Focus: Processes related to supply chain functions are poorly defined and orchestrated, requiring ad hoc planning of overlapping processes.
• Internal Integration: Supply chain processes and cross-functional metrics are transparent, defined, and planned. Resources are managed at the cross-functional level.
• External Integration: Supply chains are managed with strategic partnerships governed by mutual business objectives, common processes, and data sharing (including external data).
• Cross-Enterprise Integration: A collaborative digital supply chain ecosystem aligns the objectives and processes of all parties, enabling real-time planning, execution, and responses.

Developing data-driven supply chain resilience

Do you know your supply chain’s data maturity and which technologies you can use to thrive in an age of supply chain disruption-as-a-rule? We can help. SoftServe has 30 years of experience in developing supply chain solutions for manufacturing, transportation, and retail. We know how to help you bring the data maturity of your supply chain ecosystem to the next level — and become truly resilient.

Read the second part of this series to learn more about the powerful data-driven supply chain resilience tactics you can develop with your maturity. And if you are ready to start building a roadmap to make your company immune to disruption-as-a-rule, let’s talk.