Questions you need to ask to realize a resilient supply chain
In a series of articles for Supply Chain Management Review I’ve discussed supply chain resiliency and the steps executives can take to strengthen their operations in the short and long term. Let’s close with four key questions supply chain leaders must ask to prepare for the future.
1. Who’s your customer and how is their behavior changing? It’s critical to understand how COVID-19 has impacted your client, how rapidly management is responding, and whether they are thinking proactively. If a customer’s behavior is not changing to flex with the shocks of COVID-19, then you have to question their long-term prospects. If they are making changes, are they expecting to “return to normal” or will their changes be permanent?
The customers you need in 2030 may not be the customers you have today. Those that don’t adapt to big external shocks may struggle. If your customers are making lasting changes, then you’ve got to find out how, and how fast, so you can remain their top-tier supplier.
2. What’s your customer trying to achieve with your product or service? It’s every supplier’s job to use digital tools to get closer to key customers if you’re to have half a chance of understanding value from the customer’s perspective. That’s crucial in B2C sectors, where feedback cycles are rapid and consumers have shown how quickly they’ve adapted to COVID-19’s constraints.
3. Can you change how you provide your products to increase value? Here’s where rubber meets the road—where you determine how you’ll not only match what your customers most need today but also what they’ll need far into the future.
One great example: Best Buy is reconfiguring a quarter of its stores as fulfillment centers to handle the surge in online shopping that the retailer’s top team believes is a permanent change. That means a big redesign of their supply chains. Best Buy knows its customers aren’t defining value in terms of product features or low prices; what they want these days is convenient and safe shopping.
4. What does that mean for your operations? Now your perspective turns inward to see if you have the skills, tools, processes, and technologies to provide more value. If not, what do you need to do next? You may need to build new capabilities, make a strategic acquisition, and bring in partners.
Crucially, do not lock in for the long-term. No one knows what comes after the threat of COVID-19 dissipates. So, it’s crucial that tomorrow’s supply chains can be rapidly redesigned and reconfigured to weather whatever lies ahead.
I hope my articles have rung alarm bells loudly enough for supply chain leaders to hear the pandemic as a real wake-up call. There really is no going back to what once was. Now is the time to start designing truly resilient operations for the long haul. Now is the time for action.
Shanton Wilcox is the US manufacturing lead at PA Consulting
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