The Impact of Covid on the Supply Chain
Although the restaurants and stadiums are starting to fill back up around the globe, many manufacturers are still experiencing the impact of significant supply chain disruption. In 2020, some companies saw huge increases in demand for products as others experienced a sharp drop in sales. While many indicators suggest that consumer buying patterns are returning to pre-COVID conditions, driven by pent-up demand, many unknowns remain. Experience is a great teacher and savvy manufacturers are already building agility, flexibility, and speed into their inventory management strategies.
Make no mistake: the surge is coming. A recent survey released by the National Association of Manufacturers reveals that 88% of manufacturers are optimistic about 2021. The surge is likely to be small at first, but once it reaches the tipping point, it will be like water bursting through a dam. That is what manufacturers need to prepare for. Keeping up with demand will not simply be a matter of stocking more parts. It will be about stocking the right parts, in the right places. Being proactive in your approach means addressing the issues now.
Here are three tactics that are helping manufacturers get ahead of what’s coming:
#1: Prepare for the surge in demand
As more people resume past practices, like taking vacations and traveling to see family, more vehicles will be on the road and more equipment will be used in the field. While it may make sense to stock greater quantities of some fast-moving parts, loading up on too many of the wrong ones will lead to higher excess and unnecessary carrying costs. Using an intelligent spare part inventory management solution to tell you exactly which parts you need, when and where, and will help you meet higher demand without higher costs.
#2: Increase visibility into and collaboration with your dealer network
Your dealers are on the front lines, interacting with customers and ultimately providing make or break experiences for your brand. As customers increase equipment use for both business and pleasure, it’s more critical than ever to have insight and influence over parts purchasing and stocking strategy. Leading global OEMs ensure the highest level of collaboration with their dealers regarding parts availability.
#3: Rely on simulation-based forecasting for greater accuracy
While everyone’s crystal ball is a bit cloudier than usual based on the unique disruptions of the past year, smart OEMs will greatly increase their odds of success by running inventory planning simulations. Your ability to forecast based on the data you can extract from these simulations increases agility, because you’ve already seen potential outcomes and can pivot more quickly based on what actually plays out.
Agile Inventory Management
McKinsey & Company lists the five trademarks of agile organizations as: strategy, structure, process, people and technology. Rather than an organization operating as a machine, the agile organization operates as a living organism. This means flexible resources, end-to-end accountability, and leadership enabling action. Agile companies have proven to achieve greater customer satisfaction, faster time to market, higher revenue growth, and more engaged employees. Now is the time for you to get agile.
Stay tuned for the second post in this series on post-COVID resiliency, where we’ll focus on pricing. In the meantime, take a look at the key features of Syncron Inventory.
SHARE THIS POST