PC-JUN23-PG42.1_Layout 1 06/06/2023 15:49 Page 42
SUPPLY CHAIN PLANNING
ADDRESSING SUPPLY CHAIN VULNERABILITIES
Ultimately, the ability to re-forecast and adjust plans at a regular clip will be crucial to
driving flexibility and sustainability when it comes to climate- conscious supply chain planning
Tony Player, Domain Principal, Supply Chain at Anaplan, explains how data- driven forecasting can strengthen UK supply chains amid climate change and economic contraction
upply chain resilience has been elevated to a boardroom discussion in recent years as organisations have realised the inherent business risk associated with a fragile supply chain ecosystem. It’s clear that an agile, streamlined supply chain operation is critical to a business's ability to remain stable in a fragile economic environment, a top-of- mind concern given the International Monetary Fund (IMF) forecasts a 0.3% shrink in the UK economy in 2023. But beyond a potential downturn, a rise in extreme climate events and the transition to Net Zero is also a cause for concern.
S
The challenge? The UK relies heavily on international supply chains for products ranging from food and machinery to semiconductor chips, but those supply chains are strained from years of pandemic-induced disruptions. The Climate Change Committee's Climate Change Risk Assessment highlights a notable lack of resilience in the UK's domestic and international supply chains, and the government's risk assessment corroborates this finding.
Not only do UK supply chain leaders need to prepare to mitigate climate-driven risk and disruption in the short term, but as ESG regulations evolve and tighten, they must also plan for the Net Zero transition. So, what can UK supply chain leaders do today to limit their exposure? Risk analysis and scenario modeling, combined with continuous, data-driven forecasting and an open line of communication across the supply
42 JUNE 2023 | PROCESS & CONTROL chain is a good place to start.
Unexpected climate-driven events can severely impact supply chain operations, from factories to transportation routes. Digital twin technologies can help supply chain leaders contextualise risk and identify potential points of failure across their ecosystem of suppliers and partners. Essentially a virtual copy of a physical supply chain, a digital twin enables a company to combine data from suppliers, manufacturers, warehouses, and logistics partners, with real-time signals from external data sources, like weather data, and use that data to identify any vulnerabilities up and down the supply chain.
Once those vulnerabilities have been
identified, creating ‘what-if’ scenario models is a great way to pressure test supply chain plans, forecasts, and operations. Supply chain leaders can take a specific planning model – like a standard inventory or assortment model, for instance – and see the impact a climate event might have on that model in both the short and long term. Leaders can put contingency plans in place based on those predicted outcomes, which in turn will contribute to faster decision-making if and when disruption occurs.
A great example of the value of this type of scenario modelling comes from Del Monte – a global producer, distributor, and marketer of fresh fruits and vegetables. Because of El Nino, the company struggled to prioritise product allocation. However, by running real-time scenarios in the Anaplan platform, Del Monte
can now see what areas may not be profitable due to weather, and report that data to their logistic teams to adjust strategy. In addition to preparing UK supply chains for unplanned disruption, supply chain leaders must also think about the long-term shifts that must occur to meet the transition to Net Zero. With the current financial climate and geo- political turmoil, this is bound to be a fluid conversation at best. New regulations and reporting requirements will be introduced, goals and targets will shift, and businesses will be tested by their ability to re-calibrate and adjust their plans in order to stay on course. Consequently, supply chain leaders must work closely with their ecosystem partners to ensure the sustainable flow of goods, without compromising short-term liquidity or long- term growth. Access to clear, real-time data – housed in a single environment – will be critical to success. Businesses will want to be in constant communication with their suppliers and partners on things like pricing, sourcing and production, downtime, labour, and emissions output. This transparency will help organisations track their progress against targets and adjust to adhere to new regulations as they are introduced. To create more resilient and sustainable supply chain operations, leaders must also systematically and regularly re-assess and re- analyse the data available to them. Although a general sense of uncertainty will linger for years to come, the good news is a strong, data-driven forecast can help companies hit even a moving target. Supply chain leaders can leverage continuous forecasting to mitigate risk in the short-term, while also identifying opportunities for growth in the long term. For instance, in advance of the winter shopping season – when weather is particularly dreary – a company can leverage weather, logistics, and inventory data to forecast the impact a severe storm might have on carrying costs and profit margins.
Supply chain leaders also need to have an eye on the future. For many, this will require a mindset shift, in addition to a shift in processes. It’s an ability to recognise that strategies and plans will evolve, just as the world around us does. Stress testing and risk management, transparency up and down the supply chain, and a data-driven, continuous approach to forecasting – these changes can help UK supply chain leaders address vulnerabilities, navigate weather-related volatility, and build more resilient and sustainable supply chains.
Anaplan
www.anaplan.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54
