By, Dr. Anne Robinson, Chief Strategy Officer, Kinaxis

In the three years since supply chains hit mainstream news, disruption has become endemic, while supply chains struggle with the downstream repercussions from the pandemic. CEOs and boards are just waking up to the scale of the problem without a clear path to a solution. Now, a new approach stands to strengthen and streamline supply chain management.

Three years ago, the COVID-19 pandemic thrust supply chains into the mainstream. Headlines about shortages, delays and disruptions made the average consumer realize just how critical supply chains are in every aspect of our lives.

And, although supply chains no longer dominate the front pages, they remain a topic of interest for the public. Supply chain discussions are no longer restricted to business circles; they’ve also become common in popular culture. Popular media even poke fun at supply chain problems!

However, the critical importance of the supply chain significantly pre-dates the pandemic. Driven by increasing consumer expectations and the knock-on effect on B2B companies, supply chain has long been emerging as a critical point of competitive differentiation, with savvy boards and CEOs recognizing that their supply chain is much more than the cost of getting their products into the customers’ hands.

From that perspective, the pandemic simply served to underscore the pivotal role of supply chains in the global economy. It made it clear that disruptions in the supply chain have widespread consequences, affecting everything from medical supplies to consumer goods.

Still fighting fires

Despite the pandemic’s medical aspects normalizing, supply chains hardly got the chance to recover before the next wave of disruptions hit. New global challenges, such as wars in Ukraine and the Middle East, along with fierce economic headwinds, are conspiring to keep supply and demand out of kilter, with many companies currently experiencing a glut of inventory as high inflation curtails consumer spending from the highs experienced during the pandemic.

But, when customers do part with their hard-earned cash, they want what they want, precisely when – and how – they want it. And with minimum harm to the environment. The trend of high customer expectations from pre-pandemic times is back as companies return to expanded offerings to meet them.

Supply chain challenges are evolving but not abating, with employees across functions continually working to optimize their operations and respond to ever-changing dynamics.

With the conflicting forces of volatility and consumer expectations both at an all-time high, long-practiced ways of balancing supply and demand are no longer sufficient.

A shift in mindset

Responding to these challenges requires a change in mindset. Traditional supply chain management techniques were focused primarily on reducing costs and driving greater efficiencies. If you had excess inventory or missed sales, you were held accountable.

People were responsible for their own little silo of the supply chain, taking in information and passing it back out, assembly-line style, with little regard for how it played out down the line. And that was OK at the time because it was reflective of the speed of business.

But as companies have begun to embrace consumer and market dynamics and want their supply chains responsive to them, the speed of business has accelerated. The mandate for supply chains has also grown beyond pure efficiency to encompass resilience, top-line growth and sustainability.

This requires companies to think more holistically – to understand the impact of changes and decisions, not just on a single function or metric, but on the performance of the supply chain and the business – as a whole. Understanding top-line dynamics is essential to effectively balance supply and demand across the end-to-end supply chain.

Historically, this is not how supply chain practitioners were educated. As such, the change in mindset required to run the supply chains of the future is also heralding a changing of the guard. The good news is that supply chain is emerging as a career of choice for many of our brightest young minds, with record numbers of applications to academic supply chain programs from the next generation of supply chain leaders.

New rules, new tools

The supply chain game has changed. It’s less about being a chain and more about being a network of networks. If your suppliers’ suppliers’ supplier is a small component manufacturer in Taiwan that was hit by an extreme weather event, you need to know. But just knowing isn’t enough. You also need to understand if that Tier 3 supplier is responsible for a significant percentage of your component supply so you can act right away if their supply is at risk. You need to understand whether you are dual-sourced or have an alternative supplier you can call on to tide you over until the factory in Taiwan gets back online.

Legacy supply chain tools just weren’t designed for this level of insight. As the supply chain landscape becomes ever more complex, a new approach is needed.

Creating harmony from cacophony

As a child, I played clarinet (a big thank you to all the music teachers out there!) The pinnacle of my clarinetist career was playing in the Newfoundland Symphony Youth Orchestra. Although we were a strong youth orchestra, as any parent of a budding young musician knows, I definitely heard my fair share of instruments out of tune! I can also recall the pure magic when it all came together – from a cacophony of squeaks and squeals into a beautiful, melodic sound.

To deliver a virtuoso performance, supply chains also need to be in tune, in time and in sync. To reach this level, you need a group of musicians who all understand what the final performance should sound like, their part in making it happen, and how to improvise when someone hits a wrong note.

But traditional supply chain management largely treated each part of the supply chain as entirely siloed functions. Demand planners forecasted expected demand and were measured on their accuracy. Plant managers ensured effective manufacturing and were often measured on throughput and utilization. Inventory planners placed product in the right place to balance supply and demand and were measured on working capital costs. And transportation and logistics leaders aimed to deliver product as efficiently as possible such that customers received what they wanted, when they wanted it, with delivery accuracy as the unit of measure. With latency between each step in the chain and different measures of success, decisions were made on stale data and optimized for that function. Like the sections of an orchestra playing without a conductor, the end result was often out of sync.

Today, it is possible for supply chain planning and execution to be synchronized, instead of cascaded data and decisions.

Although the concept of ‘orchestrating’ specific parts of the supply chain is not new, a new paradigm is emerging that extends the concept of orchestration beyond the traditional bounds of just planning, or just execution, to continuously connect, synchronize and optimize all the most critical pieces of the supply chain, across all time horizons, business processes and organizational boundaries.

Supply chain orchestration integrates planning and execution. It streamlines the process, reducing the chances of errors and misalignment. A continuous feedback loop gives practitioners across the network real-time insights into how the plan is performing, allowing for rapid adjustments and improvements and ensuring that the plan is closely aligned with execution goals.

In spite of the fact that I’m a long-time supply chain practitioner now working for a technology vendor, I believe this challenge isn’t about software. It’s about having a common vision for how you want your supply chain to act to meet your customers’ demands. What do they want and how can you deliver it to them and delight them in the process? Only with this vision firmly planted can you look for a solutions provider who can help you achieve it with technology.

Supply chain orchestration: A symphony of efficiency, customer focus and resilience

Supply chain orchestration removes walls between different supply chain functions for a more seamless response, so everyone in the orchestra plays in harmony. From long-term planning to last-minute delivery, everyone can collaborate so it’s all in tune.

A well-orchestrated supply chain is able to provide competitive advantage to make sure the company is not just surviving but thriving, delivering top-line revenue efficiently while also doing right by the environment and society. And as disruptions arrive, as they will continue to do, orchestration ensures the supply chain is ready to face them head-on across the network.

This kind of resiliency is music to the ears of both customers and boards!

Download our guide to learn more about supply chain orchestration.

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