Office Depot Vice President of Supply Chain, Mike McCreesh, considers key ways of keeping up with rapidly changing supply chain demands.
While increasing the capacity of your wholesale supply chain has been seen as an essential means of meeting buyers’ needs, it is important to note that buyers’ demands are constantly evolving. Because of this degree of demand flexibility, only highly responsive and fully integrated vendors can meet the challenges of modern purchasing patterns and practices.
The truth is you can no longer rely on baseline or average purchasing patterns when faced with major fluctuations in what buyers need at any given moment. To match variable purchasing demands requires a more sophisticated approach. This not only calls for highly responsive systems for stock management and the careful management of relationships throughout the supply chain, but also requires a way of reviewing and understanding the key factors affecting buyer behaviours.
Over recent years, we have seen suppliers taking on more product lines to enable them to respond rapidly to buyer demands that often arrive without warning. And yet extended stock offerings only form one element in the push to improve supplier efficiency. For evolving demands to be met in the years ahead, suppliers must always be able to source from a robust and responsive pool of vendors.
Successful suppliers must put in place secure secondary and even tertiary sourcing options if they are to prevent future delivery failures. Without such well-managed arrangements and in the face of delivery failures, buyers are going to look elsewhere for their purchasing demands to be met.
Suppliers also need to understand how each buyer operates and then shape their service around such individual characteristics. For larger clients, suppliers need to adopt a highly detailed and collaborative approach from the very start of the relationship. Such close collaboration enables account teams to analyse previous and ongoing demand patterns and use that knowledge to anticipate a client’s future requirements and adjust supply capabilities accordingly.
Close and effective relationships with individuals within buyers’ teams are a critical factor where rapidly evolving demand needs are to be met. By staying close to customers, suppliers can gain a greater and more immediate understanding of what is required right now while also gaining knowledge of future developments that can allow them to respond more efficiently in meeting anticipated future needs.
In other words, when you have the opportunity to meet and review the items required by your clients on a regular basis, you are in a much more agile position to match both their immediate and ongoing needs. You also need to ensure that this fact-finding needs to be added into a more formal review to accurately determine how and when particular items are going to be required. It is essential to see this task as a key element when it comes to retaining clients and not as a simple box-ticking exercise.
Suppliers must accept that change is now a constant. You cannot sit back and look forward to easily-accommodated minor adjustments over the years ahead. As it becomes increasingly difficult to anticipate demand levels, you must pay even closer attention to your buyers’ needs. Fail to do this and you risk damaging both your reputation and that of your business.
It is only by predicting demand more accurately through a mix of market awareness, strong client relations and effective stock forecasting that you can retain your focus and maintain a competitive position in such challenging times.