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Home » Worried? Then act now
Perspective

Worried? Then act now

February 22, 2011
James A. Cooke
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If you're in charge of a supply chain today, then you have every right to be worried. Oil prices are on the rise, generating worldwide concerns about inflation. North African and Middle Eastern countries are roiling with political upheaval that could threaten shipping through the Suez Canal. In the United States, Congress remains deadlocked over federal spending priorities, and joblessness hangs on like a disease the economy just can't shake. It's difficult, moreover, to predict when (or even if) those who do have jobs will want to start spending again.

It's not surprising, then, that a recent study conducted by the Tompkins Supply Chain Consortium, "Uncertainty is Certain: Perceptions of Future Risk on the Rise," found that the anxiety level among supply chain chiefs is higher than ever. But that doesn't mean you should be sitting around waiting for the next crisis to come along. Nervous or not, you need to take action now to reduce uncertainty in your supply chain.

As outlined in the report, many supply chain executives are already making concerted efforts to reduce uncertainty. For instance, some have implemented formalized risk management processes, including working with suppliers to create contingency plans to handle supply chain disruptions. Other respondents said they are making efforts to match supply planning with real-time demand.

Some are also initiating collaboration with suppliers and customers in order to better gauge the economic conditions that underlie their forecasts. Others said they are converting their operations to the make-toorder model, thus reducing inventory requirements. Still others are implementing lean practices and delaying final product completion until further along in the manufacturing process.

And they are investing heavily in technology. For example, many are purchasing supply chain software to help them redesign or reconfigure their networks in order to accommodate future growth or to increase flexibility. In some cases they are updating or adding other software tools, such as warehouse management systems, transportation management systems, or supplier relationship management systems. In addition, some respondents said they are purchasing software to help them predict sales volumes for various markets.

Nobody has a crystal ball for predicting the future, but that should not stop you from doing your best to prevent problems from happening. The times call for leadership. If—like the respondents to the survey—you've already embarked on a couple of courses of action, that's commendable. And if you haven't done anything yet, then maybe it's time to take the lead and move ahead with some of the steps your peers have already adopted.

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    James A. Cooke is a supply chain software analyst. He was previously the editor of CSCMP's Supply Chain Quarterly and a staff writer for DC Velocity.

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