Much like the mental fortitude needed to make it through yet another Zoom call, the global supply chain in 2021 has tested the resilience of the Walmart supplier community.
Shipping container shortages, congested ports, delays in manufacturers receiving components and the scarcity of truck drivers and other critical supply chain personnel have equaled lower instocks, increased OTIF fines and additional deductions off invoices for hundreds, if not thousands, of Walmart suppliers.
With supply chain issues expected to last at least another year, suppliers have had to shift from crisis management to crisis recovery, thinking through how best to structure their supply chain teams and strategize resource allocations going into 2022.
Leverage tech-forward and data-driven processes. Research from McKinsey & Co. highlights the push to digitization as the No. 1 disruptive trend in the post-COVID era. For many suppliers, teams consist of a complex entanglement of global and domestic stakeholders, all of whom have their own way of looking at data. This often leads to information that is siloed, resulting in slower reaction and response times. Better tech can lead to better visibility and provide quicker insights, increased supply chain transparency, better-informed trade-offs and deeper collaboration between teams.
Instead of downloading TikTok to keep your tech fresh (we can hardly blame you!), begin charting a digital roadmap for 2022. Determine the data capabilities required for a more responsive and resilient supply chain, assess the weakest points internally and research how best to plug the gap. An essential question to ask is: What can you automate so teams can spend time on strategy instead of repetitive tasks? Weigh the pros and cons of in-house development versus leveraging third-party data analytics providers to make the call on the best place to invest your resources in 2022.
Coordinate within larger networks to unlock efficiencies. This strategy may seem counterintuitive, yet suppliers with sophisticated supply chain teams understand that collaboration within larger networks can unlock efficiencies for all parties. We’ve worked with teams that have established joint ventures with other suppliers, allowing them to reduce the cost of parts, increase manufacturing capacity, reinforce stability in the supply chain by minimizing the need to contend with competitors and even access new markets.
How can you get there? The first step is to identify potential partners that complement you and align with your organization’s priorities in 2022. You’ll then want to identify the type of collaboration you wish to pursue, like product or service expansions or even vertical integrations, and begin reaching out to those potential partners to begin discussions. It’s essential to recognize what both parties can contribute and ensure both teams have clarity around what the collaboration is expected to achieve.
Deploy dynamic resource allocation. Dynamic resource allocation refers to moving money, talent and focus to areas that provide the most value to an organization. Research shows that companies that dynamically reallocate resources are worth twice as much as their less agile counterparts. So, while the COVID crisis came out of left field, it presents a unique opportunity for organizations to redeploy their resources in creative ways that still map back to the business’s broader objectives. Suppliers can employ a few tangential strategies, including enabling cross-training across functions to create a more agile internal talent pool and investing in remote and digital collaboration tools.
It’s going to continue to be crucial that organizations do their best to future-proof their supply chains. Short of a crystal ball, the best we can do is to continue taking a critical look at our internal team structures and resource allocations to ensure we uncover previously obfuscated sources of value for our organizations to grow and thrive.
Bring it on, 2022.
Editor’s note: Stacy Tan is the senior director of retail strategy at SupplyPike, a Fayetteville-based supply chain software company. The opinions expressed are those of the author.