Talking to manufacturers and wholesale and distribution companies has made it clear that there are several consistent trends at play at the moment.
Competition is fierce
Everyone is working hard to get their products to market, including suppliers and competitors. There is a big push across the board to respond to changing consumer behaviour. This is creating new channels to the consumer, causing disruption in the market and putting pressure on service levels.
Global dynamics are having an impact on supply chains
The disruption caused by Brexit and Covid-19 are ongoing and unlikely to be resolved any time soon. Ports are still congested, with ships re-routing and delaying containers, and there is a backlog of containers sitting in fields and waiting to be dealt with. Manufacturing in China is likely to be disrupted as the government seeks to achieve clean air ahead of the Beijing Winter Olympics, which will undoubtedly have a knock-on effect along the supply chain.
Recruiting people is tough across the board
Businesses are struggling to recruit for production, operations, and warehousing roles. Across the UK, there are more than 1.1 million job vacancies, with over 70,000 of those classed as urgent. The shortage of applicants isn’t down to just one factor but likely includes an unwillingness to risk changing jobs in uncertain times; the fact that the furlough scheme is still running; and the ‘pingdemic’ and the resulting uncertainty over work and childcare options.
There may also have been a more fundamental shift over the last 18 months which has pushed people out of the habit of looking for new jobs. Add to this the driver shortage thanks to isolation restrictions and the supply chain difficulties are compounded.
Support for planning
These factors all create challenges when developing plans. Many firms have opted to increase stock holdings to ease the pressure of the uncertainty they face – a costly method of maintaining service levels. For others with plans to grow, there are capacity challenges to figure out.
The variables at play in the current market make multiple scenarios possible simultaneously. Business must be prepared to make decisions in real time as the realities of the situation emerge. For the buyers, the planners, and the finance teams this is a headache. Manual processes mean more hard work and use valuable time resource.
With uncertainty being a constant on the horizon for some time, the planning process needs more support in place to cope with the fluctuation in production and delivery times and volatility in demand.
The firms that will emerge strongest from this period of uncertainty will be those with the most solid planning processes. Those who have put systems in place to free their people from unnecessary manual tasks and maximise the potential of scenario planning to create competitive advantage. These firms won’t have to rely on the unnecessary cost of excess safety stock and will also avoid negative impact on their service levels.
To learn more about how the AGR software can help you create the space to plan for ongoing uncertainty, get in touch today.