Benefits of Strategic Planning for Supply Chain Management

If the government’s response to the COVID-19 pandemic accomplished anything, it forced supply chain planners to abandon traditional supply and distribution systems in favor of more strategic and integrated paradigms.

The shutdowns, shelter-in-place mandates and travel bans “created a million small interruptions,” according to Emma Cosgrove with Business Insider. Coupled with high consumer demand, the disruptions created global transportation problems.

“The backlog and the mess of factory closures, labor issues, and equipment shortages behind it has been deemed the ‘everything shortage’ or the ‘supply-chain crisis,'” Cosgrove concluded.

One McKinsey & Company survey of supply chain executives found that 93% of their companies were planning significant strategic changes to the configuration and operation of their supply chains to make them more resilient, agile and flexible.

But the urgency created by the pandemic-related disruptions seems to be faltering, according to the survey, noting that, among other things, “talent gaps are wider than ever.”

How Do Professionals Acquire Expertise to Leverage the Supply-Chain Talent Gap?

The online Master of Business Administration (MBA) with a Concentration in Supply Chain Management program offered by Bowling Green State University (BGSU) equips graduates with the skills and insights required for executive and senior management roles.

The curriculum explores topics such as integrating the source-make-deliver supply chain model into overall business strategies, identifying sourcing strategies, evaluating suppliers and managing contracts and vendor relationships.

Competency in those categories is central to supply chain strategic planning. It can lead to a variety of careers in logistics, production and supply chain management, as well as purchasing leadership and transportation analysis.

What Are the Critical Factors in Strategic Supply Chain Planning?

After the pandemic rendered obsolete the traditional supply chain models — which typically were annual re-evaluations limited to growing revenue and cutting costs — planners broadened their focus to include areas such as customer engagement, sustainability and long-term benefits of shareholders.

This age of volatile market trends, competitor movements and consumer sentiment — and the potential for other Black Swan events — requires a mindset shift in planning that creates nimble, growth-oriented supply chains.

To help planners make that mindset shift, Cascade recommends a multi-step process for creating and deploying a strategy-oriented supply chain.

The information-gathering stage includes:

  • Understanding business goals and objectives. Those insights are the foundation of developing a strategic plan that integrates supply chain operations with company strategies.
  • Identify what the supply chain needs to align with business goals. Technology, regulatory compliance, market conditions and global instability drive supply chain operations, affecting everything from sourcing and inventory to logistics, warehousing and data management.

The design and development stages include:

  • Produce a clear, concise blueprint for a strategically planned supply chain. Using the compiled information, outline investments that will support technology that enables end-to-end visibility and processes for managing risks and contingency operations.
  • Assemble a detailed strategy built on the design blueprint. Put all the parts together, including who your trading partners and customers are, how you will build sustainable relationships with them, clear goals for moving material down the supply chain, budgets and timelines, risks and visibility that provides early warnings of potential disruptions.

Regardless of the process used to design and deploy an integrated supply chain, Gartner says it must account for five key capabilities. It identifies those capabilities as knowing what is possible (supply sense) and how to make it happen (supply response), knowing your customer needs (demand sense) and how to provide them (demand response), and adhering to a vision and promise (decide and commit).

“To create a highly orchestrated, end-to-end supply chain strategy, all five capabilities must be well-developed and highly integrated,” Gartner recommends.

How Is Supply Chain Planning Different From Supply Chain Execution?

The Gartner and Cascade models include execution in the planning process to ensure collaboration and integration of the related but distinct operations. While planners take a long-range, strategic view, execution relates to the tactics: daily functions such as order fulfillment, transportation and warehousing, for instance.

They intersect at the point where collaboration that supports optimizing an agile, responsive strategy is built on data generated by daily operations. Oracle suggests thinking “of them as two sides of the same coin.”

For those interested in learning how business professionals apply strategic planning to optimize their organization’s supply chain management processes, consider earning your MBA – Supply Chain Management online from BGSU.

Learn more about BGSU’s online MBA – Supply Chain Management program.

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