The COVID-19 pandemic has been a stark reminder for supply chain professionals of the critical importance of being prepared to navigate sudden twists and turns, whether they’re economic, geopolitical, environmental, social or competitive in nature.
Although the scale of the current global health crisis is unprecedented in recent decades, it is not the first sudden turn supply chain planners have had to navigate, and it won’t be the last. In today’s complex and highly interdependent global economy, uncertainty is a constant, and to succeed, supply chain planners must be prepared to lead through it.
A report from Gartner tackles the subject of “winning in the turns,” offering guidance to organizations looking to improve their ability to prepare and plan for disruption to their supply chains. “Gartner’s efficient growth research shows that a small number of organizations that anticipated the future and developed comprehensive action plans before the financial crisis of 2008 to 2010 were rewarded with sustained advantage over their competitors in the following eight years,” the report cites.
The report also provides insight into the different ways in which companies dealt with the impact of the devastating 2011 Tohoku earthquake and tsunami on the global semiconductor and electronics supply chains. At the time, Japan manufactured more than 60 percent of the world’s raw silicon wafers. Gartner research shows that the companies that fared better in response to this event had adopted specific behaviors prior to the crisis that limited disruption to their supply chains. These included pre-qualifying alternative sources as backups and requiring suppliers to provide auditable business continuity plans. The least successful companies, not surprisingly, were those which hadn’t done much strategic thinking, had no specific plan in place for events that might severely disrupt their supply chains, and were forced to figure it out in real time.
In the aftermath of these particular events, the report notes, “Identifying the risks and monitoring the triggers of impending disruption is not enough. Leaders prepare plans associated with each risk to be ready to execute if the trigger point does occur. They prepare so they can think correctly under pressure. They also keep their eyes on the long term and this mindset and culture allows them to double down and accelerate through the turn while others slow down.”
The report offers an action plan that provides answers to these important questions. Arguing that supply chain professionals must accept uncertainty as a given, Gartner identifies three pillars that are essential for winning in the turns:
• Strategy: Preparing to act confidently amid uncertainty
• Cost: Using scenario planning and focusing on cost optimization
• Talent: Identifying and developing your workforce of the future
The report explains in detail how supply chain leaders responsible for planning must start pushing their teams now to make sure they are prepared to implement plans, make course corrections and are ready to accelerate out of each turn by focusing on these three vital areas. In addition to the specific recommendations for achieving successful outcomes in each of the three vital areas, the report links to the complete findings of its “efficient growth” research along with a wealth of additional Gartner research and resources that provide insights into best practices covering all aspects of supply chain strategy and planning.
To learn more about how you can successfully lead your organization through all manner of turns, download the full report: Winning in the Turns: A Supply Chain Planning Action Guide – Focus on Strategy and Action Plans, Marko Pukkila, Gartner.