The Need for an Adaptive Supply Chain

Posted by Sean Murphy on May 24, 2019

How a supply chain operates has far-reaching impacts on a business. If any one area of the chain has a weak link, it could affect revenue or halt operations. To survive and succeed in today's landscape, companies need to move toward an adaptive supply chain. When they do, they'll improve speed, efficiency, and customer experience.

Why Companies Need an Adaptive Supply Chain

One factor leading to the transformation toward an adaptive supply chain is technology's immediacy. It compels customers, especially the millennials, to want instant gratification. This leads to customers' "now, now, now" attitude, which shortens product life cycles and pushes supply chains to deliver faster.

In addition to faster delivery, the growing use of mobile and social technologies helps speed purchase decisions. Customers can research products, compare them, and see friends' recommendations, all right from their mobile devices.

Another factor affecting the supply chain is globalization. The new trade agreements and ever-changing tariffs have an impact on global trade. Any change in one or the other can break a supply chain.

All these factors are making it necessary for companies to change to an adaptive supply chain. It becomes possible with the advancing social, mobile, analytics, and cloud (SMAC) capabilities that comprise the SMAC stack. To convert from a traditional to an adaptive supply chain involves more than implementing supply chain technology.

Shifting to an Adaptive Supply Chain Model

A company's move toward an adaptive supply chain won't happen quickly, but it'll be worthwhile because it'll drive revenues, increase productivity, and cut costs. Almost three-quarters of executives say they expect digital advances to greatly affect their supply chains according to a Bain survey.

Yes, technology plays a large role in changing the supply chain, but it's not the only component. An adaptive supply chain has a greater chance of succeeding with organizations that are customer-centric.

"A modern shift to outsourcing, digital transparency and supply chain 'sharing' now demand a fresh approach of managing and coordinating domestic and global supply chains," writes Dave Kipe in "How Distributors Can Embrace the Adaptive Supply Chain."

Where should companies begin in transforming their supply chains? Cognizant's Adaptive Supply Chains recommends:

  • "Rethink supply chain strategies": Look for new channels, store formats, and geographies.
  • "Reinvent supply chain operations": Find sources for lower-cost supplies.
  • "Rewire supply chain systems": Speed processes and be ready for increases in volume.

Building an adaptive supply chain allows companies to react quickly and efficiently to changing conditions. Before investing a lot of money into technology to transform a supply chain, companies must have a process in place to understand and respond to their customers' needs.

"An adaptive supply chain builds connectivity between people and data," Kipe writes. "This provides real-time visibility into inventory, product flow and potential hazards."

To learn about our customized supply chain security solutions for warehouse operations and industrial facilities, please contact us.

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