The Shifting Supply Chain Landscape: What Retailers Can Do

Grammy award-winning singer and songwriter Sheryl Crow once crooned "A Change Will Do You Good." And, it seems as though each presidential candidate is marching to the same beat. However, when it comes to managing change within the supply chain, many professionals can quickly find themselves caught off guard in a complicated and suddenly shifting landscape.

The critical stream of people, tasks and events that make up today's supply chain operates in a world of multiple channels, wide variances, increased competition, fickle loyalties and unyielding economic realities. In 2002 alone, the value of goods transported inside the United States was $13 trillion. This freight moved over 4 million miles of roadways, 140,000 miles of railway and 26,000 miles of navigable waterways. So, what happens when there's a disruption along the way?

Professionals need to be able to see - and react to - change across the entire network, without risking unforeseen consequences such as unexpected costs or service-level violations. And while unplanned change is inevitable, it is how well you consistently manage this change that will determine how successful you will be over the long run.

Embracing Change
At the beginning of this political season, the nominations for both parties were wide open. At different points in the campaign timeline, political pundits have been quick to predict winners based on preconceived notions from polling, debates and issues discussed in the media. However, primary voters and caucus-goers often indicated very different outcomes. For example, many thought John McCain was on his way out at the end of last year. Now, he's settled in as the Republican nominee. From the onset, Hillary Clinton was presumed to be the clear front-runner for the Democratic nomination. Instead, she found herself in the fight of her life with Barack Obama. And, it will be the candidates who have embraced change along the campaign trail and made the appropriate adjustments that will eventually win their respective party's nomination.

Similarly, supply chain professionals need to keep abreast of what is changing or shifting along their supply chains. Once companies make a decision to buy certain goods, they must start the planning process - much like candidates do at the start of every new state primary or caucus campaign. But plans alone are not enough. Like in the political season, many external and uncontrollable factors come into play to disrupt all best-laid plans. So, in order to be able to handle the kinds of disruptive changes common in the supply chain, companies need to develop a big-picture view with deep visibility into reliable data. This much-needed depth perception gives them the ability to quickly correct their course; manage the impact of disruptions; and develop options for remediation.

It's All About the Data
Whether running a Presidential campaign or managing a corporate supply chain, one needs to gather intelligence to create greater visibility into what is happening on the ground. And, it all begins with good data coming from a reliable source. Just as candidates cull electoral demographic data (income, race, location, etc.), supply chain professionals need to gather key information (inventory levels, shipments, transportation capacity, manufacturing capacity, costs, lead times, etc.) from suppliers, hubs, carriers and customers, and then combine it with information from within their own organization so they can see what's happening  - as it happens. Supply chain visibility needs to operate across disparate systems at detailed levels, throughout the entire global supply chain.

But there's no value in great data if it's hard to access or understand. With a complex supply chain, many individuals within an organization need to have the same meaningful, real-time data to make the best decisions for a company. For example, when inventory hasn't arrived in the distribution centers for an upscale Atlanta department store for a well-advertised spring promotion, managers need to know now where the shipments are; what's causing the delay; and what additional options with costs and lead times they have in order to get the goods delivered on time.

Without real-time, accurate data, professionals cannot identify and respond to events before they start to create problems within the supply chain. It's imperative to know how supply chain disruptions will affect the company and, ultimately, its customers. It may only be a minor disruption, such as a missed shipment or damaged goods, but it could involve a major interruption, such as a factory strike or natural disaster. Regardless, having a supply chain event management system in place allows managers to track all disruptions as they occur, so immediate response and corrective action can take place before it's too late.

Remedy the Disruptions - And Do It Quickly
Supply chain professionals can use information on specific events to ensure their plans remain in sync with actual shipments, deliveries and orders, and they can track total costs to make better decisions for their companies. This type of intelligence allows companies to stay flexible and agile enough to change on the fly and shift transportation modes and routes to satisfy cost and service-level goals. Information such as this also provides a variety of options for remediation when a disruption occurs, for example:

- Do I switch transportation modes from ground to air freight if interstates are closed due to snow and ice? 

- Should I source goods from a different country if I'm having trouble getting through customs? 

- Is it necessary to flow directly to a store versus through a distribution center in order to meet the deadline for an in-store promotion?

When it comes to political issues change can simply mean making a choice between two extreme positions. Republican or Democrat. No new taxes versus tax hikes. Universal health care for all or not. Change in the supply chain, on the other hand, is not such a black and white proposition. It demands dynamic solutions that provide real-time visibility into order, inventory and shipment information - giving key resources at every level in an organization the information they need to make more informed supply chain decisions.

Eddie Capel is executive vice president, product management and global customer support for Manhattan Associates. In this capacity he is responsible for global product management and customer service operations.