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Whatever you do, don’t collaborate with your supply chain planning peers. No need to share information about inventory levels, customer orders or transportation woes. And definitely don’t try to predict sales out into the future, because there’s just no evidence that it’s a worthwhile endeavor.
OK, I didn’t think you’d agree with that. If nothing else, the previous paragraph was an unexpected swim against the current of overwhelming support for doing the exact opposite. Of course you should be collaborating. Of course you need to share information upon which critical supply chain planning decisions are made. Of course you should be doing everything possible to plan out as far as it is practical with as much accuracy as possible. And of course you should be leveraging advanced planning and optimization technologies to help create highly profitable operating plans. Why? Because it’s your best defense against the supply chain planning risk and unpredictability that is here to stay.
A recent survey from Deloitte shows that global executives are increasingly concerned about the growing risks to their supply chains and costly negative impacts, such as margin erosion and inability to keep up with demand. Of the 600 executives surveyed, most converged on the need for a strong risk management strategy to mitigate the impact of ever-present disruptions. Yet, an alarming 45% of the surveyed executives said their supply chain risk management programs are only somewhat effective or not effective at all. And the number one reason why their supply chain risk management programs are not successful: “lack of acceptable cross-functional collaboration.”
Despite strong evidence from all corners of supply chain outlining the benefits of collaboration, including increased visibility, flexibility and control, many companies continue to struggle to achieve an effective level of collaboration across the enterprise. They continue to operate in an array of information silos, preventing the creation of a true picture of the current state and future outcome of the current supply chain operating plan. Look deeper into the Deloitte survey results and you’ll find that “current tools and limited adoption of advanced technologies are often constraining companies’ ability to understand and mitigate today’s evolving supply chain risks. Although many of the surveyed executives report using a wide range of tools to manage risk, only 36% use predictive modeling and less than one-third (29%) use risk sensing data, worst case scenario modeling, or business simulation—tools that can help drive more proactive management of supply chain risk.”
With many advancements in supply chain software over the last decade, it is surprising that companies continue to struggle in these areas. Triple Point’s Supply Chain Optimization solution has been helping process manufacturers achieve enterprise-wide collaboration enabling tactical and strategic supply chain planning for over twenty years.