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Supply Chain Issues Aren’t Over: Here’s What You Can Do

Tuesday, March 14, 2023 | Supply Chain

Safe to say, many aspects of the supply chain have improved since 2020, namely its reliability. While the height of the Covid-19 economic effects seems to decline, long-lasting supply chain distribution issues remain. 

Recently, there has been a shift in patterns that result in an overflowing supply of products that are no longer in demand. The issue many companies now face is that supply and demand are no longer balanced. This disruption, while widespread, can be minimized if handled correctly. If your company is experiencing this issue, consider addressing these five elements: 

  1. The efficient supply chain is not the most effective: Many people believe the efficient supply chain is the most cost-effective option. However, this forgets the variability of the supply chain. Factoring in supply chain variability, plan feasibility, and inventory costs will help your company find the best cost-effective solution. 

  2. Spreadsheets do not reflect the best solution: A spreadsheet model ignores the intricacies of the supply chain and, therefore, cannot deliver an effective solution. According to The Talk Supply Chain Leaders Need To Have With Their CFO, “During the pandemic, 94% of supply chain decisions were made based on spreadsheet analysis” (Forbes). 

  3. Functional metrics create instability in the supply chain: While it may seem like metrics (such as the lowest manufacturing costs) would be a fundamental focus, they throw the supply chain out of balance. Instead, focusing on margins, such as inventory turns or operating margins, will reflect accurate demand. 

  4. Governance is essential: The kind of organization you have (regional or global) impacts the decisions you should make. Focusing on achieving the right balance for your specific organization will help yield the best results. 

  5. Marketing-driven needs move marketing-driven decisions: Marketing-driven initiatives need a focus on customers. When evaluating marketing initiatives, ask: "is this of importance to the customer?" (Forbes).

With the ever-changing economy, ensure you make the right decisions for your business. Impact Washington is Washington State’s Manufacturing Extension Partnership representative. We are committed to helping local manufacturers thrive by implementing sustainable business practices that help them succeed in the long haul. Contact us today to set up a consultation. 

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