13 Jan 2010 Procurement Software isn’t auto-pilot
Supply Chain management can be like spinning plates – spin as many as you can and just make sure that the ones that drop are the ones that count least. But it’s a fairly exact science in the 21st century and armed procurement software that will feed us with data, reports and dashboards a business can ensure that accurate demand forecasts inform demand planning to ensure regular and undisrupted supply, minimal inventory, happy customers and a profitable business.
But underlying successful planning is a set of assumed and prioritised risks together with associated mitigation strategies. What happens if one day the wind changes and those basic assumptions become invalid or your priorities turn on their head?
In a recent Research Brief from Aberdeen, they report that the top “Supply Chain Disruption Events” changed from “Supplier Capacity did not meet demand” in 2008 to “Reduction in Customer demand” 2009 and it illustrates the importance of being able to change rapidly from a growth position in the good times to a defensive position when times get tough – Agile Supply Chain Management
It’s not just the risks associated with day to day and week to week fluctuations in supply and demand that need to be mitigated if you are to manage supply chain risk successfully. Businesses need to keep a weather eye on, not just on their supply chains, not just on their local market or even their industry but also on the global economic backdrop. It can fundamentally effect your key risk management assumptions.