How can supply chain flexibility cope with demand uncertainty and volatility?

A good example of this concept in action is MEIO. Multi Echelon Inventory Optimisation. https://www.logility.com/blog/the-difference-between-io-and-meio/

Time is very important aspect for the supply chain management system and the business. Product, Price, Production & Logistics are very much challenging and dependent upon the same. Finding out right products and services by providing commercial/ technical knowledge for sales and coordinating with internal stakeholders. Supplier relationship and maintaining healthy relations to improve cost, production lead time and long term contracts.

According to my experience the most flexibility can be achieved at the supply chain design phase. The inventory planning & optimization always works within the boundaries set-up previously. Threfore if you can add multiple languages on the labels or leaflets within the product so you can use them across various markets. Produce, or contract manufacturing, for 'blank' products and add labels when you have confirmed orders. In other words move the push-pull boundary upstream the process and apply ATO (assemble to order) instead of MTS (make to stock) strategies to absorb demand variability. This is what we have done at Opontia when we entered 20+ markets in Europe and we were uncertain what way demand will evolve.

Die Verwendung standardisierter Bauteile oder Baugruppen über verschiedene Produktgenerationen oder Produktlinien hinweg erh?ht nicht nur die Produktflexibilit?t, sondern erleichtert auch die Ersatzteilbevoratung. Dieser Ansatz kann die Komplexit?t und die Kosten in der Lieferkette reduzieren, indem die Anzahl der erforderlichen Ersatzteilvarianten verringert und die Verfügbarkeit von Ersatzteilen w?hrend des gesamten Lebenszyklus eines Produkts verbessert wird.

Supply chain flexibility in procurement can navigate demand uncertainty by diversifying suppliers, fostering strategic relationships, and leveraging technology for real-time data insights. Adaptable contracts and agile sourcing methods aid in responding swiftly to market fluctuations, ensuring resilience amid volatility. The key lies in proactive risk mitigation, dynamic planning, and collaborative partnerships across the supply chain to buffer against unpredictability.

Traditionally systems for supply chain operations were transactional. This is still true for most of ERPs and WMSs. They work with fixed procedures on how to process orders. However, inceasing need for flexibility led to creation of Order Mangement Systems, and evolution of some WMS into multi-location decision solutions. With well applied order management logic you can direct volumes to sites within your network which have unused capacity, you can source inventory from non-standard locations in case otherwise you would not be able to fulfill order on time, and so on. Check solutions like OpenBravo, Channel Engine, Channel Advisor, or Baselinker. Personally I used the last one. Depending on your network & channels mix you may chose another.

Process flexibility is a crucial aspect of modern business operations, and it plays a significant role in adapting to dynamic market conditions. Here are a few key points expanding on the importance and benefits of process flexibility: 1.Adaptability to Market Changes: 2.Customization and Variety: 3.Reduction of Lead Times: 4.Operational Efficiency: 5.Quality Improvement 6.Innovation and Experimentation: 7.Risk Mitigation 8.Collaboration and Communication In conclusion, process flexibility is a strategic asset that enables companies to navigate a quickly changing business landscape, exceed consumer expectations, and drive operational excellence.

Supply Chain Digital Twins will be the master software in this are. Ability to adjust and forecast resources and capabilities. OMSs, WMSs will be the operational tools.

Mit der fortschreitenden Digitalisierung, dem Einsatz von KI und der Einführung von Microservices erh?ht sich die Flexibilit?t im Wertsch?pfungsnetzwerk signifikant. Diese Technologien erm?glichen eine dynamische Anpassung an neue Anforderungen, Lieferanten und Kundenbedürfnisse. W?hrend physische Produktionsprozesse heute oft noch starr sind, führen Fortschritte in der Robotik und die Integration digitaler L?sungen zu einer zunehmenden Flexibilisierung und Adaptivit?t, die es Unternehmen erm?glicht, schneller und effizienter auf Marktver?nderungen zu reagieren.

Evaluating risk mitigation strategies is another important aspect of measuring supply chain flexibility. Risks, such as disruptions in transportation, natural disasters, or changes in regulations, can significantly impact the supply chain. By identifying potential risks and developing strategies to mitigate them, businesses can minimize the impact of disruptions and maintain a flexible supply chain. This can include diversifying suppliers, establishing backup plans for critical components, or implementing agile production processes.

Forecasting demand, converting forecast into supply plans, working in Sales & Operations Planning is essential to be efficient. However, to become really volume flexible one must go beyond own (directly managed) distribution network. Companies with volume fluctuations build their own distribution centers to handle 'base' demand and plan to use 3PLs to handle peak periods. This is how Edgwell does it (they have 4 own DCs in Europe and use 3 other 3PLs). This is how Franke does it (they have 2 own DCs in DACH and use 2 others 3PLs). This is how I managed Christmas spikes at HEBE. We had plans from S&OP process and contracted 3PL to handle volume exceeding our capacity for 2 months at the end of each year).

Die Integration von Dienstleistern,die sich vertikal wie horizontal nahtlos in die Wertsch?pfungskette einfügen, erh?ht die Mengenflexibilit?t weiter. Der Einsatz von Smart Contracts in Kombination mit fortschrittlichen Planungstools erm?glicht Unternehmen ein effizienteres Kapazit?tsmanagement. Diese Technologien erleichtern die Verhandlung, flexible Beschaffung und das Angebot von Kapazit?ten auf dem Markt, indem sie automatisierte Vereinbarungen unterstützen, die sich dynamisch an ver?nderte Nachfragebedingungen anpassen.

Digitizing the supply chain and the supply chain of the vendor will be critical. This will help recognize the volume flexibility and adjust it through the supply chain. Digitized supply chain (use of control tower) will enable a company to absorb the volume flexibility with minimal disruptions.

Volume flexibility in your supply chain is crucial for managing demand uncertainty and volatility. It allows you to quickly scale production up or down based on market conditions, minimizing stockouts and excess inventory. This adaptability ensures customer satisfaction through timely delivery and optimizes operational costs by aligning production with actual demand. In a volatile market, having a flexible supply chain is a competitive advantage, enabling resilience and responsiveness to changing customer needs. #SupplyChain #DemandPlanning #OperationalExcellence #Flexibility #Resilience #BusinessStrategy

Volume flexibility is crucial for staying agile in a constantly shifting market. By leveraging demand forecasting tools and lean principles, we can better anticipate changes and minimize waste. Strategic partnerships with suppliers and customers also play a huge role in pooling demand and sharing risks, which ultimately helps us balance supply and demand more effectively. This not only reduces the chances of stockouts and overstocks but also boosts our profitability and resilience in the face of uncertainty.

An example of this is the synchromodal logistics concept for multimodal container movements. Traditionally a route for a container is planned in advance and does not normally change. For example ship to the main port, then barge to an inland terminal, then truck to the final destination. In a synchromodal logistics operation the route is dynamically updated based on the progress of the container and the availability of resources. For example, if the ship is delayed the barge leg may be replaced by a rail journey to a different hinterland terminal, with a connecting truck movement scheduled for the last mile. This approach reduces cost, but also makes the operation more flexible and able to respond to unforseen changes.

Die F?higkeit, flexibel auf Kundenbedürfnisse einzugehen, halte ich für einen entscheidenden Wettbewerbsvorteil. Angebote wie Same Day Delivery, Online-Verfügbarkeitsabfragen, externe Lagerung und Kommissionierung sowie die M?glichkeit, den Bestimmungsort bereits versandter Waren zu ?ndern, sind neben den Kosten wichtige Differenzierungsmerkmale. Sie erh?hen nicht nur die Kundenzufriedenheit, sondern f?rdern auch die Kundenbindung und -loyalit?t, indem sie dem Kunden mehr Kontrolle und Bequemlichkeit bieten.

Delivery flexibility refers to the ability of a supply chain to deliver products or services to customers in a flexible manner, including adjusting delivery times or modes to meet changing demand patterns. This involves using flexible distribution networks that can access multiple channels and locations to ensure timely and efficient delivery. Delivery flexibility is crucial for coping with demand uncertainty and volatility, as it allows the supply chain to respond quickly to changes in customer demand and market conditions.

One effective strategy to achieve delivery flexibility is to collaborate with last mile brokers and let them decide 'on the fly' which specific carrier/courier use. Brokers such as Stuart, Paack, and Seven Senders offer solutions that enhance delivery flexibility by providing real-time tracking, and customizable delivery options based on last mile provider performance within specific region. Using these services, you can improve customer experience by having under 'courirer' delivery completely different companies (for example InPost in Poland, DHL in Germany, or even more specifically X-Press Couriers in Gdansk/Poland over InPost in Warsaw/Poland, and dynamically change those attributions).

Delivery flexibility isn't just about getting products from point A to point B; it's about creating a seamless experience for the customer. By leveraging flexible distribution networks and responsive logistics, we can adapt to unexpected changes and meet customer needs more effectively. This adaptability not only enhances customer satisfaction but also sets us apart in a competitive market. Imagine being able to offer same-day delivery for urgent orders or multiple delivery options that fit into our customers' busy lives—it's a game-changer for building loyalty and expanding our reach.

Para garantizar una cadena de suministro flexible, es crucial contar con una red de proveedores diversificada, confiable y cercana (near shoring), sistemas de gestión de inventario ágiles, tecnología avanzada para el seguimiento en tiempo real y una cultura organizacional centrada en la colaboración y la adaptabilidad· La capacidad de respuesta rápida a los cambios del mercado y la demanda es fundamental para mantener la flexibilidad y la eficiencia en toda la cadena de suministro. Sin embargo no hay que olvidar que una buena base para generar una cadena de suministro flexible está en la incorporación del análisis de riesgo. Una buena gestión de riesgos agregará elementos de flexibilidad a la cadena de suministro.

Firstly, diversified sourcing is essential, as it reduces dependency on a single supplier, mitigating risks. Collaborative relationships with suppliers also enhance adaptability, allowing for faster responses to demand fluctuations. Moreover, technology plays a significant role. Data analytics and artificial intelligence enable accurate demand forecasting, aiding in inventory optimization. Furthermore, agile manufacturing and just-in-time production can streamline operations and reduce excess inventory costs. To deal with demand volatility, safety stock can be employed, but judiciously to avoid overstocking. Finally, well-defined risk management strategies, contingency plans, and cross-functional coordination

Die Integration von Nachhaltigkeitsprinzipien in die Supply Chain ist nicht nur aus ethischer Sicht wichtig, sondern bietet auch wirtschaftliche Vorteile. Unternehmen, die von der Rohstoffbeschaffung bis zum Vertrieb umweltfreundliche Praktiken anwenden, k?nnen ihre Effizienz steigern und Kosten senken. Darüber hinaus verbessert eine transparente Kommunikation über nachhaltige Ma?nahmen das Markenimage und st?rkt das Vertrauen der Kunden. Ich pers?nlich habe die Erfahrung gemacht, dass Initiativen wie die Optimierung von Transportwegen oder der Einsatz von Recyclingmaterial nicht nur die Umwelt schonen, sondern langfristig zu einem echten Alleinstellungsmerkmal werden k?nnen.

???????????????? ?????????????????????? Work with several suppliers and have backup options to avoid relying on just one. This helps quickly adjust sourcing if demand changes suddenly or there are supply issues.

Despite investments in tools and leveraging AI to improve demand sensing, demand is likely to remain volatile and uncertain in BANI world. Hence, it is important to create flexibility and agility in Supply Chain. It can be done in following ways- 1) Joint Business Planning with customers and Suppliers to enable view of extended Supply Chain 2) Expand Supply Base and Create alternate Suppliers 3) Capability to produce same sku at multiple sites 4) Flexible Manufacturing Systems with faster changeovers and lower setup times 5) Visibility across Supply Chain 6) Right Distribution Network & Inventory Deployment Strategy customized as per product/sku. 7) Agile Inventory Management 8) Create multi modal and alternate transport options