Don’t Be Reactionary to Supply Chain Issues
Back in the early days of the Internet, I gained a modest following for putting forth the idea that when it comes to working in the fast-moving technology space, “If you are reactionary, you are in trouble.” Nearly 25 years later, this truism is still holding up well.
Our partner Avi Rosenthal has produced a very good presentation on current supply chain issues. Of course, many of us in the industry are all too aware of chip shortages. However, as his presentation shows, there are impactful price and delivery issues in commodities too – plastic resin, copper and other metals are only a few. There are also bottlenecks at the ports, where record high shipping costs and worse are affecting every industry, not just the technology sector that we focus on.
Knowing about all this is not enough. More to the point, what are you going to do about it? Hope is certainly not a good answer. Most observers believe that these issues may last for a year or more. Many firms have had to act decisively in response to these issues, reshaping their thinking and practice in supply chain matters. These disruptions have probably affected your company, product or service too. The question remains – what will you do?
Keep in mind that the chain of command still rules and size matters. The largest players will take strong actions and then roll downhill from there. That said, where in the supply chain pecking order is your company? What about your vendors? How about your product sector in general? These can be uncomfortable questions for any company, but they need to be asked.
The most important thing is to not lay back and just let it happen. There is a lot to do, and not just for your purchasing and supply chain personnel, if you even have them. Do you rely on your customer forecasts? How much help are they now, with shortages and unclear demand? Now is the time to rally all the sectors in your company and take a good group look at how these things may affect you.
Should your company shift its product focus to those that are easiest to support? Should you increase purchase orders and safety stock levels to account for delivery delays or cloudy forecasts? Does your company even have a real forecast function in place? Decades of just-in-time practice led by customers has winnowed stock levels. This strategy has left everyone ill-prepared for the current situation. The fragility of the supply chain has become all too visible.
These questions, and good answers to them, are imperatives right now. This is a new situation. It may require new process and new approach, perhaps even a change in company culture. What is certain is that change is here and we all need to adapt, as it will keep changing, and likely in ways we do not even know yet.
Change is hard, but we see time and again that those that are nimble and flexible are the winners. If you don’t know how to proceed through these knotty issues, talk with us. We have seen and managed a lot of change and know the supply chain situation inside out. We have good ideas for what your company can do. If you need help or advice, we are here for you.
At bluesalve partners, we have an active product development process we can share with clients to accelerate and improve their batting average. Better outcomes are good for everyone, the firms, the industry, and their customers. Let’s all get better together.
Bluesalve partners is committed to accelerating change, growth and success for our clients.