The supply chain has a major impact on the entire economy and every business’s ability to meet demand. That’s why it’s vital to spend time developing a supply chain readiness plan.
Small and midsized businesses are particularly affected by sudden shifts in consumer demand and issues within the supply chain. But, by planning ahead and using data to make informed decisions, you can prepare yourself for the future.
Read on to learn what supply chain readiness is, the steps you should take to build out a plan, and how data can help.
What Is Supply Chain Readiness?
Supply chain readiness is the overall process of planning for stability during supply chain issues. Essentially, it’s forecasting what problems could arise and building contingency plans for fighting them if they do. This involves planning for inventory levels, supply shortages, increased consumer demand, and more. It’s a vital part of supply chain management.
Data and Supply Chain Readiness
The most important tool for supply chain readiness is data. Using a combination of POS data and panel data and demand forecasting, you can build a robust plan for the future. Understanding what products offer the most stable growth and areas where the supplies are low, you can best prevent sudden losses if an issue arises. Using a retail data analytics platform like Byzzer will allow you to pull all of this information together. This lets you create a holistic view of your brand, category, and market. You can identify weak points, potential issues, and areas where you can most easily shift positions to defend shelf space and sales during a supply chain issue.
Supply Chain Readiness Step-by-step
Creating a supply chain readiness plan may seem daunting, but breaking it down into steps can help simplify the process. Your individual plan will need to be personalized to your CPG company, but there are some steps every business should include.
Here are the five steps that should definitely be in your supply chain readiness plan:
No business plan will be successful if you don’t start by defining goals. For a supply chain readiness plan, you need to establish KPIs to keep strong during times of trouble. This may be profit margins, sales velocity, or a specific retailer who you’ll want to keep supplied. Put thought into your strongest areas and plan appropriately. Sometimes it’s okay to lose shelf space in one place if it means bolstering it elsewhere.
Create a Process
Once you’ve chosen your goals, you’ll need to create a process for achieving them. This means you need to define the steps needed. This may include purchasing some additional raw materials to keep on hand, tracking inventory levels and shrinkage, or limiting the amount of time it takes to get goods out the door. The more detailed you are in creating these processes, the less likely you are to be overwhelmed when the market starts changing.
An often overlooked step, you’ll want to assign leaders to each part of your process. Pick team leads and managers you know will be able to ensure the process is followed. If you forget this step, you may be left scrambling when issues arise. It’s also important for your team to know who they can look to in times of trouble.
With the steps above taken care of, it’s time to back up your goals and process with data. Use a platform like Byzzer to accrue POS, panel, and trend data that shows your existing and projected positions for each KPI. This step allows you to accurately identify areas of risk and keep yourself honest. You’ll never achieve a KPI that’s beyond your current trajectory when supply chain issues happen. You should also take the time to identify competitor positions, so you can keep an eye on their struggles or successes and react appropriately. You may be able to come out on top once the supply chain issues subside.
Create an Action Plan
Finally, it’s time to plug the data into your goals and process to create the plan. Start by determining what will trigger the processes you’ve established. This could when a KPI drops below a certain number, when sales increase or decrease, or even when a global inflation issue appears. Then, pick the actions that need to be taken in each case and the plan should flow. The goal is to make your plan as simple, effective, and repeatable as possible.
Use Analytics to Stay Ready
Investing in a good data analytics tool and using this data to make informed decisions is key when facing an unpredictable supply chain. By understanding sales trends, competitor positioning, and consumer behavior you can better prepare for the future.
Byzzer by NielsenIQ has all the tools necessary to help your business understand these trends including how they change over time. With our comprehensive reports, you can have all the right data at your fingertips. This includes breakdowns and insights to help you understand what it all means. We can even help with education around CPG data and analytics.
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