Holiday Season Tip: Improve Communication Within Your Supply Chain Organization

supply chain

Responsiveness and agility are king for supply chain management during the holiday season. But how do organizations properly respond to supply chain disruptions? According to Rob Cheng, head of growth for Elementum, a software company offering supply chain management applications, communication must improve.

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Shipping delays, inventory issues, changes in demand — such supply chain disruptions are inevitable at this time of year. Companies don’t always know what specific challenge their supply chain will face during the holidays, but they do know they will likely face some complication, Cheng said. Organizations must be able to act quickly when a problem arises, he added, and that responsiveness is possible when information flows more freely throughout an organization.

If a company has a “fixed process” in place where only those at the top are able to solve a problem or make decisions, they will fail, Cheng said. Information silos need to be broken down, and members of a buying organization must have access to any information necessary to feel empowered to make decisions in critical situations.

Ninety-nine percent of the time, however, important supply chain information is held too closely by those at the top of the organization, Cheng said. His advice to supply chain managers: “Find a way to start being more transparent and open inside your supply chain organization.”

Consumer Demands Call For Responsiveness, Agility

Agility, too, is becoming more important as consumer preferences change and demands increase. Deloitte predicts consumers will spend up to $965 billion this holiday shopping season, 4% more than last year. Online shopping had grown considerably in recent years, as well, with the National Retail Federation predicting 46% of all holiday browsing and shopping will take place online this year. Additionally, shifting demands in delivery are impacting companies. More people want same-day delivery and consumers are increasingly taking advantage of buy online, pickup in store offers. Companies and their supply chains need to be able to react to these volatile consumer preferences, Cheng said.  

While the rise of omnichannel retailing and growing consumer demands may pose new challenges for companies this holiday season, the need for an agile supply chain is a priority organizations experience every year. A 2013 survey by Capgemini asked supply chain managers to identify their top challenges to maintaining seamless supply chain operations. Eighty-six percent of participants said having the proper processes in place to respond to volatile consumer demands in real time was a top challenge. Other challenges identified include end-to-end visibility across the supply chain (84%) and a lack of integration in multi-channel supply chains (identified by 67% of participants).

Agility also comes into play as companies introduce new products to the market. Cheng said new products now have an almost “movie-style release,” where the first weekend of sales can determine if the product is a total success or failure. Regardless of the outcome of that opening weekend, the company will need to respond and do so quickly. No longer can a company wait until the end of the holiday season to see how a product performed — it must keep up with sales and performance in real time.

A high level of agility is possible with proper communication, Cheng said. Organizations must be able to react in real-time, have alternative plans in place and make quick decisions when necessary, and that begins when proper communication and the sharing of information across the organization is achieved.

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