What are your business predictions for 2021?
We may see greater levels of collaboration in supply chain between large organisations that would previously have been bitter competitors.
This will, however, raise challenges behaviourally and contractually in the short term because of the complexity of the supply chain process.
Nevertheless, businesses as a whole will be forced to reach enhanced levels of pragmatism, agility and flexibility.
Long-term plans will become worthless. Planning horizons in the wake of Covid-19 and Brexit should become shorter, with flexibility built in. Being able to switch direction quickly will be key to success and survival.
The situation facing businesses is so complex and dynamic that it is impossible to predict exactly how the landscape will look by the end of 2021. As a result, they should revert to simple principles; preserve cash and be agile in the way they respond to demand. The longer your plan line is, the more complexity and uncertainty you have to build into it.
This means there will be a large degree of rethinking about the length of supply chains and their resilience and flexibility. Companies that remain rigid and dogmatic could become casualties in such a scenario.
As Paul Cunningham put it, businesses should focus on quick, agile responses rather than impractical long-term strategies. “You are deluding yourself if you think you can long-term strategise your way out of short-term cost and consumer behaviour changes. There are now more individual moving parts to manage across procurement and supply chain than there have been for a long time.”
This will be challenging for businesses whose behavioural culture is long-term and traditionally focused on precision.
But this year, more than ever before, businesses need to adapt and learn. If a strategy looks mostly correct, follow it; because the consequences of not doing anything could threaten your survival.
Thanks to all our attendees. We will reconvene in March to address other business issues and will share the findings thereafter.
To read part 1 of this blog series, please click here: What impact has Brexit had on Procurement and Supply Chain?