The floods, storms, or other natural calamities may disrupt the entire supply chain processes and leave their customers or businesses dissatisfied. The supply chain processes are disturbed because of weather issues where the customers are left unsatisfied because of the delayed shipments and unfulfilled orders.
What will the commercial effect of these natural catastrophes be if you are in charge of a supply chain, especially if you consider being demand-driven?
What is a demand-driven supply chain?
If you want your distribution network to be flexible and responsive to supply chain challenges, you must have a strategy to work with your supplier base without rendering the workflow. Companies across the globe use the “Build to forecast” approach to deliver efficiently but have some drawbacks. The weather catastrophes are unexpected and inevitable, and hence preparing the orders without understanding the demand might prove invaluable. However, shifting to the “Build to order” strategy guarantees the efficiency any supply chain network requires. The warehouses easily communicate between the distribution network and analyze the demands, and these avoid any unanticipated interference that may be unpredictable in traditional distribution networks.
Let us take an example. In late 2013, a storm with heavy rains hit the South West of the United Kingdom, and all the businesses were shut down and were inaccessible.
The constant pressure of delivering the supplies to the consumers must have been daunting. The industries like tourism, distribution, construction, retail, and agriculture faced the highest losses.
Consumers being unable to visit stores and retailers unable to deliver daily necessities were the two most pressing challenges during these difficult times. Demand for products, supply shortages, and unsatisfied consumers are all outcomes as businesses struggle to analyze, understand, and respond accordingly.
Conventional Supply Chain Scenario
The manual processes are slow and dull-witted, and so are the communications between the supply chain partners. The swiftness required to analyze and understand the demands and respond accordingly is inefficient.
Back-orders would keep piling up if floods knocked out a vendor or internal distribution center, for instance. Simultaneously, buyers keep making purchases in the absence of authentic inventory information. It could result in surplus inventory over time, which is worsens if demand dips for any reason, perhaps resulting in price cuts in the future.
Buyers that are unreachable by delivery partners will likely have difficulties communicating, leading to delivery postponement and order cancellations. It will add to unsold inventory expenses, not to mention customer feedback problems.
Demand-Driven Supply Chain Scenario
A sophisticated B2B technology that optimizes operations and improves communication among supply chain partners is a critical facilitator of a demand-driven supply chain. When properly implemented, it can eliminate miscommunication and the lagging intervals that happen as a consequence.
As in the above-mentioned case of a supply chain going down, the shipment can be conveniently re-routed, or the shipment status can be informed on the consumer side relatively faster. It would decrease the possibility of pre-orders and appropriately set customers’ expectations. Backup solutions because of delayed or canceled shipments can be offered to customers (B2B or B2C) and lessen the impact of canceled purchases.
Buyers stuck in flood-prone areas would receive real-time notifications on their shopping while suppliers look for different delivery methods and schedules (if they still have internet). If the weather changes in that locality, the supply chain will be flexible enough to respond swiftly, redirecting stock from places not facing that seasonal change and preventing the need for extra supplier orders.
Leading organizations are changing to demand-driven supply chains for several reasons. One is that businesses know that their identity and customer satisfaction may help or hinder their business. When companies turn to demand-driven supply chains, they can make meaningful commitments even in the face of difficulty.
Contemporary B2B integration technology is essential for facilitating this type of supply network. From expanding core processes beyond the organization to integrating secure business partners and supporting multiple communication protocols, it actively encourages the system to work seamlessly. In current times, this technology is required to perform the tasks to stay competitive in the business.
We, at HubBroker, provide integrated solutions that are at the leading edge of innovation. To optimize the business effect, combine your industry knowledge with Hubbroker’s revolutionary platform and seamlessly integrate your vital data and automate business processes. Connect with us today to know how we can assist in growing your business.