At any given time, ensuring your supply chain is running smoothly is already a demanding task, but a perfect storm of supply chain disruptions — ranging from escalating geopolitical tensions to extreme weather events like back-to-back Florida hurricanes, which we saw at the end of 2024 — makes it even more unpredictable.
When businesses aren’t able to meet consumer demand amidst these uncertainties, they miss out on opportunities to boost their bottom line and retain loyal customers. In fact, new research from Cin7 shows that 71% of consumers are frustrated by shipping delays, and 54% said they would be willing to pay more for items that are guaranteed to be in stock and available for immediate delivery.
To navigate these disruptions and win the favor of consumers, supply chains must be more resilient than ever. Despite years of digital innovation, many leaders are still struggling to anticipate and recover from unforeseen challenges. That’s why it’s critical to return to the fundamentals, reinforcing the basics to ensure successful tech integration and better crisis management.
Rising Need for Resiliency
Supply chain resilience is the ability to quickly recover from any abrupt change in operating factors, whether from man-made or natural disasters, economic slowdowns, or even something as simple as changes in consumer behavior. Achieving this requires supply chain leaders to not only predict disruptions but also adapt operations swiftly and innovate in the face of uncertainty. A key challenge in this process is gaining full visibility across the entire supply chain — something the industry is still working towards.
Although innovations like IoT and AI are helping address these challenges, long-term resilience requires more than just technology. It starts with a "back-to-basics" approach, laying the right groundwork. Here's what supply chain leaders need to focus on:
● Success Begins with Your Network: At its core, supply chains are really all about your network, and ensuring that they are aligned to fulfill your business mission should be the number one priority. While adopting digital processes and AI solutions certainly makes things easier and more efficient, your foundation must be set on a strong network.
In today’s world, relying on one supplier for your business is no longer a competitive strategy. Just look at the East and Gulf Coast port strikes and catastrophic weather events from late last year to understand why the ability to quickly pivot away from one supplier to another is critical. Supply chain leaders need to understand who their suppliers are, how they operate, what risks they have to their business and ensure that they have backups in place when these disruptions happen.
For example, if an event forces one of your suppliers to go offline or is unable to fulfill your orders - your business must have a contingency plan in place. Leaders need to understand whether or not they can replace one supplier with another, if they can leverage other means of transportation (like air freight), and what impact this will have if they are not able to do so.
● Know Your Market: With new disruptions constantly popping up, supply chain leaders need to understand how these might cause vulnerabilities and what needs to be done to mitigate them. For example, while no business could have predicted COVID-19, studies show that companies who kept tabs on the day-to-day spread of the disease and reacted accordingly fared much better since they had an early mover’s advantage.
Supply chain leaders must be as informed as their competitors and up to date on market developments. This can only be achieved if procedures are updated regularly and can be applied quickly, allowing for quick decision-making at multiple levels.
● Inventory Management and Forecasting: Long-term success for your supply chain relies on certain business principles that must be mastered. When it comes to dipping your toes into innovation, forecasting and inventory management are invaluable tools in mitigating disruptions. For instance, forecasting allows businesses to know what is required of them to meet consumer demand and ensure a steady flow of accurate and timely market information. Afterall, a distributed network is best leveraged when businesses can anticipate the pivots they might need to face in the wake of disruption.
When it comes to meeting consumer demand during the peak holiday season, inventory management is also critical to avoid stockouts and overstock situations. While stock outs can damage a business’s reputation with its consumers by not having enough goods to meet their demand, overstock can have a tremendous financial impact on business. Tracking inventory and activity across all layers of the supply chain helps to be more resilient against these disruptions and minimize risk.
● Embrace “All Digital:” By mastering the above basics, supply chains will now have a strong foundation that will allow them to go all in on digital processes. When it comes to supply chain management, data production, enhancement, and exchange are critical as it allows leaders to have a holistic view of all processes at once. As a result, leaders can unlock new capabilities to anticipate disruptions and make important adjustments in real-time. This not only helps supply chains build long-term resilience, but enables them to adapt and innovate quickly and efficiently, helping to mitigate near-term challenges as well.
Just as it’s important to carefully select and understand your supply chain network, businesses must be careful when selecting digital providers. In the face of disruptions, if your providers are not resilient, you will not be either. Some important things to understand include whether or not they are in the cloud or a fixed data center, if they are in compromised areas, whether they are SOC 2 compliant, and if they have published disaster recovery scenarios in place.
Given this, supply chain leaders also need to thoroughly understand the risk involved when selecting these digital providers.
The Bottom Line
Digitally transforming your supply chain is essential in today’s rapidly evolving landscape, but it’s crucial not to overlook the power of a back-to-basics approach. By first establishing a strong network, building a dynamic team, and leveraging deep market knowledge, supply chain leaders can confidently integrate AI and other digital technologies. Whether navigating peak holiday seasons, unexpected disruptions, or just day-to-day business, this foundational approach ensures businesses can fully realize the benefits of true supply chain resilience.
Kris Kniaz is CTO of Cin7.
This article originally appeared in the January/February, 2025 issue of PARCEL.
