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The traditional supply chain has long been viewed as just that: a series of interconnected links working together to deliver products to customers. But what happens when those links are weak or disconnected? Just like a broken bicycle chain, the entire system grinds to a halt. In today’s fast-paced, globalized world, this is a risk many businesses can’t afford to take.
The reality is that traditional supply chains are riddled with silos. Disconnects between planning and execution, linear approaches that don’t account for disruptions, and a lack of unified data all contribute to inefficiency, missed opportunities and, ultimately, a weakened competitive edge.
With domestic transportation rates being so low, it’s very difficult for logistics leaders to further reduce logistics expenses. Aligning logistics with supply chain planning provides a new opportunity to create increased efficiency and further optimization, which will lead to larger savings opportunities, greater revenue growth and an improved customer experience.
The disconnect between planning and execution
One of the most glaring issues is the disconnect between strategic supply chain planning (SCP) and on-the-ground execution (logistics). SCP often operates at a high level, creating strategic plans that don’t always translate to real-time situations. Meanwhile, execution teams focus on fulfilling immediate orders without necessarily feeding insights back into the planning process. This creates a blind spot, hindering the ability to adapt to changing market conditions or unexpected disruptions. Logistics focuses on execution but not enough on tactical and strategic planning as in transportation modeling and transportation forecasting.
The traditional linear model, in which resources flow in a one-way path from raw materials to finished products, is no longer sustainable. It fails to consider factors like resource depletion, environmental impact and the need for circularity. Imagine a chain where materials are constantly recycled and reused, rather than simply discarded; this is the model we need to strive for.
The power of unified data and platforms
The good news is that the tools exist to bridge these divides. Unified business planning and, more importantly, unified supply chain platforms (USCPs) offer a solution. These platforms break down silos by integrating data across all supply chain functions: planning, sourcing, manufacturing and transportation. This allows for real-time visibility and decision-making, enabling businesses to respond quickly to changes in demand, optimize logistics and improve overall efficiency.
Consider a consumer packaged goods manufacturer where disconnected planning and transportation systems hinder efficiency. A complex custom solution is required to bridge the gap. Imagine the time and resources saved with a unified platform that seamlessly integrates these functions!
Technology alone, however, is not a silver bullet. Successful implementation of USCPs requires a shift in mindset toward collaboration. Silos need to be broken down, and teams across the supply chain need to work together. This requires a human-centric approach that leverages the power of technology to augment human capabilities, not replace them.
The research is clear: Companies with closely aligned supply chain teams outperform their peers. By unifying data, fostering collaboration and embracing technology, businesses can create a more resilient and sustainable supply chain. This translates to better employee retention, faster growth and a competitive edge (in terms of operating margins and inventory turns) in the years to come.
The future of the supply chain is not a rigid chain, but a dynamic network, interconnected and adaptable. By embracing unified platforms and fostering human-centric collaboration, businesses can unlock the full potential of their supply chains and thrive in the face of disruption.
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Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.