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Industrial Talk Podcast: How to Build Supply Chain Resiliency
Thank you, Scott MacKenzie! Host of Industrial Talk Podcast, Scott dove into this topic with David Cahn, Product Marketing Manager at Blue Ridge.
David dared to not only discuss the problems that pop up on wholesale distributors with zero warning, (duh; we all know the problems), but also gave strategies on how to actually build supply chain resiliency to avoid them in the first place.
The Struggle is Real
Be sure to catch the show if your business is in a constant “Oh, $*%*” mode reacting to supply and demand fluctuations every day, such as:
- The pandem … [do I even need to type that?!]
- Shortages on high-demand products and hoarding
- Unforeseen weather events
- Spoilage on fresh fruits and veggies because of shutdowns
- New legislation, inflation and other macro-economic forces
- High-demand products spawned from new return-to-work safety programs (like cleaning supplies)
- Seasonal demand spikes and regional demand variation
- Whole shifts in business models, such as ecommerce and one-hour delivery
- Influx of new products — more to anticipate, carry, replenish and move. Side-note: did you know the average product lifecycle is only 14 months? That means new products are coming out every day.
The Solution is Easy
If you haven’t made adjustments to create a more flexible supply chain, you’re in trouble. Once one of the links in the supply chain begins to falter, all the others follow suit. Even if you can react to supply and demand, you still have half of the battle left to fight — fulfillment. How do you get those products better and faster than your competitors?
Especially in industries like Hardgoods, HVACR, Automotive, Industrial and Electric, and Wine and Spirits, David said one of the biggest reasons to build resiliency now is that the consumer is deliberately cutting out the middlemen. No one wants the inventory. Everyone wants to accelerate that whole supply chain and fulfillment equation. At the same time, people are driving more customized, personalized products to which you must adapt… and at quite a pretty penny:
“What’s funny is, I’ve been at a lot of industrial sites, and they have this hush-hush conversation about their bone yard. It’s a special location where nobody wants to carry that extra inventory, but they have to. So when problems happen, they can pull buffer stock from their bone yard,” David explained. The solution forces the need for machine learning-based intelligence that automates the math and decision making behind all of this. With a focus on no longer needing that bone yard.
Assurance, Not ‘Insurance’
Safety stock is an expensive insurance policy that is no longer sustainable. Rather, David points to machine learning as the key to creating supply chain resiliency. By putting machine learning-based supply chain tools into place now, you can move faster on highly accurate, confident forecasting decisions, thus negating the big spend on insurance. Same results, less overhead.
Listen to the podcast to get David’s recommendations on how to do this: