2016-01-18
I have chosen the article “How Consumers Are Transforming Supply Chain” by the specialist LeTart J. It has been published on 01 Dec 2015. This article characterizes the new kind of consumers who know always what they want, when and where they want (Le Tart, 2015). These consumers are the new digitally-empowered generation. In this case, one can say, that linear supply chains go away. Supply chains transform from a product-centric to a customer-centric focus. It has many implications for supply chain risk management. Let’s analyze them in more detail.
Firstly, it needs to analyze end-to-end chain visibility. More consumers buy different goods in online-shops. Service of delivery to the consumer’s home or office is important for all online stores. So, there are more risks in supply chain, which are connected with the delivery process.
Secondly, the operation of the distribution centers is in the focus. The time between manufacturing and delivery of goods to the consumer has reduced by several times during the last years. Such situation implies that companies must process orders more quickly in order not to lose a client.
The third impact is connected with the item-picking. The packaging requires more labor intensive and staff training. In this case, the whole order fulfillment is based on the different scheduling, task management, training and incentives.
Nowadays it becomes possible to detect supply chain risks much more quickly. At the same time, the three main parts of the supply chains look the same as before:
product/component sources;
logistics infrastructure;
logistics service providers.
Analyzing current market space, we can note that leveraging market intelligence can help to manage supply chain risks better. Current supply chain risk model must include the following components: accountability, visibility, product/logistics specifics, sourcing, supply chain best practices and chain of custody (Craig, 2015).
The effective risk detection system has three main steps: analysis, validation and assessment. The data from multiple source is needed for the step of analysis. Specialists should investigate supply chain and risks depending on products, countries, suppliers, logistics infrastructure and logistics service providers.
The step of validation aims to highlight the significant information and verify advantages and drawbacks of the transition of order from the manufacturer/retailer to the end-user. The result of this step is recognition of the supply chain risks.
The last step of assessment is connected with both quantitative and qualitative information that is obtained in the previous steps. It should be noted, that assessment as alone process can be too subjective. But using relative indicators is better than absolute figures. As a result, each detected risk should be estimated as an index. It can help to set priorities and focus on the highest supply chain risks. The risk detection system must be improved every two-three years. In this case, the new risk project should be done (Craig, 2015).
In conclusion one can say, that supply chain risks have been changed since information technologies have become an integral part of life for the majority of consumers of goods and services. The current risk detection system must be based on the following principles: speed order processing, alternative variants of delivery, possibility to make the order from any device at any time and anywhere. Such changes make the online-market intelligence more useful tool to anticipate and manage all supply chain risks.
References
Craig, T. (2015). Guide For Supply Chain Risk Management - How to Identify, Validate, and Assess | eft - Supply Chain & Logistics Business Intelligence. Eft.com. Retrieved 18 January 2016, from http://www.eft.com/supply-chain/guide-supply-chain-risk-management-how-identify-validate-and-assess
Le Tart, J. (2015). How Consumers are Transforming Supply Chain. Logistics Viewpoints. Retrieved 18 January 2016, from http://logisticsviewpoints.com/2015/12/01/how-consumers-are-transforming-supply-chain/
