What can intelligence do for the supply chain?

The current market phase, but also the gradual recovery of activities, will find not only a crisis in terms of market demand, due to the lack of liquidity and the timid approach of consumers and companies to the recovery of spending, but also critical issues market offer with particular reference to b2b markets and supply networks. 

It will unfortunately not be granted for many suppliers to overcome the crisis period with the current structure in terms of resources, workers, the possibility of making investments, the difficulties of optimisation to accommodate changes in demand.

At the time of the recovery, there is a strong risk of precariousness of the supply networks which will be particularly high in those where these networks are made up of small and very small companies highly specialised in a market, product or processing niche specific. This is a potential risk for those at the head of a chain or a production network, which could lead to not responding to customer needs both in terms of quality and in terms of flexibility and celerity of supply.

Then the evaluation of the current supply network could be an important element of the restart period of the activities. Also in this case market insights come into the game and look back, upstream, and not downstream towards the market. I believe that the lines of support activities for the assessment and reorganisation of the supply chain can be substantially five:

• First of all, an assessment of the current supply chain with particular reference to market risks. In other words, I think it is necessary to understand if the current suppliers are experiencing critical issues, what possibilities they have to give continuity to their business, what measures they are actually taking to get out of the current market phase and why not what potential support they may need from us leader in a choral logic. The output of an assessment of this type is an evaluation of the strengths and weaknesses of your partnership system upon exiting the lockdown. A real swot analysis focused on the supply chain which, however, already clarifies the possible guidelines for a reorganisation towards competitiveness and business continuity;
• The possible search for new suppliers in relation to changes in demand, if there will be changes in the specific sector of reference. An aspect of the changes in demand, in addition to the difficulty linked to the shortage, may be characterised by a geographical reorganisation due to a need to narrow the range of action of international trade flows. It will be interesting to understand if the markets will in fact reorient themselves towards a greater proximity with the creation of geographical clusters (Europe, Asia, the Americas) compared to the current borderless globalization. Of course, among many others, the supply chain will have to adapt to this geographic change;
• Having the names of new suppliers is not enough, however. On new potential suppliers it is necessary to work with the same approach operated with the current ones. Profiling of new potential partners will be required to answer the following questions among many: What is the level of quality? What is reliability? What kind of production flexibility can they guarantee? Which production capacity? Which of my competitors are they currently suppliers to?;
• The question that also arises in facing an analysis of this type is ‘how are my competitors doing’? A competitive analysis on the supply chain of competitors and on the changes and perspectives of these in light of the current crisis could provide interesting and differentiating ideas regarding the strengthening of our network;
• Finally, the subject of strategic operations like M&A for instance. It will be an important aspect since one of the supply chain reorganisation approaches could be through buyout activities where the analysis activity is not simply based on economic-financial due diligence but also on competitive and market assessment of companies that could become part of our galaxy;

These are some of the many elements of assessment in support of a supply chain management activity aimed at reducing risk and improving competitiveness.

But in the end what is the approach that guides the search for this information? As we have indicated, it is not that of traditional market research, but of company insighting in light of the external context. In this case, we are talking about evaluations aimed at a strategy for improving operations, efficiency, but also a possible theme for improving the quality of the offer if we consider the supply chain as an the end-to-end starting point up of value stream which goes up to customer. And in the end, everything is part of a broader approach that has market competitiveness as its ultimate goal.