The challenge of balancing supply chain costs and customer needs is not a new one. But the confluence of a number of trends on both the supply and demand sides has added to the difficulty of achieving a profitable middle ground.
Customer expectations are advancing at a quicker rate than ever before, with consumers demanding immediate delivery and instant gratification, as well as low prices. Demand levels can skyrocket or plummet, seemingly on a dime. Each customer in a long global supply chain has another customer farther upstream, compounding the impact of shifts in demand.
The global marketplace in which supply chains operate is more connected, but also more tumultuous. Should one company struggle to manufacture products, due to any number of forces, the effects can ripple throughout the entire supply chain. A conflict on one side of the globe, for example, can pose alarming implications for companies on the other side. This challenging landscape requires organizations to approach their supply chain strategies in a completely new way that involves taking into consideration a variety of circumstances, including some that are beyond their control.
The pandemic highlighted the tremendous impact that these issues can have, illuminating some critical vulnerabilities in modern supply chains. It also lit a fire under companies to advance the practice of supply chain response planning, with a particular focus on increasing transparency and data-driven decision-making. In a marketplace characterized by increased customer expectations, global competition and price pressures, mastering the ability to respond to supply and demand shifts and shocks must become a core competency.