World champion supply chains: Preparing for the World Cup
32 teams. 11 cities. One world champion. Millions of football fans will converge on Russia for the World Cup in June. They’ll bring their noisemakers, their fandom, and a willingness to whip out their wallets and buy bags and bags of souvenirs. The question for companies is this: Is your supply chain prepared to handle the demand generated by this massive event?
Companies across the world have wasted no time launching their World Cup merchandising and promotion efforts. Food and beverage companies are revving up promotions, preparing to capitalise as fans rush to stores to stock up on snacks and drinks for the big game. Football kits, shoes, tournament balls, and other collectibles will generate billions of dollars in revenue for retailers.
In 2014 alone, Adidas made over $2 billion on football gear, thanks, in part, to the Adidas-kitted German national team winning it all. And others are taking advantage of this worldwide event to build their brand, like this Qatar Airways campaign. Everybody wants a piece of the World Cup. It’s a chance to be associated with an event where the whole world is watching, make an imprint on the world’s imagination, and likely make a massive amount of money in the process.
Are supply chains ready for the huge demand that might be coming their way in these emotional weeks to come? If they’re not, they’ll miss a big opportunity to score while their competitors hoist the trophy.
Make sure the supply chain is match-ready
The emotions of the World Cup will drive impulse purchases, bringing huge increases in demand that supply chains must be ready to meet. The most successful companies have been preparing for many months, building forecasts and plans to meet the demands for their products, both in physical stores and online. End-to-end supply chain visibility and accurate forecasting are essential to this preparation. End-to-end visibility ensures that a clear game plan is in place if changes to supplier or distributor are necessary, and an accurate forecast ensures that your company won’t come up empty when demand spikes. A clear view of the product portfolio is required to keep tabs on what products will become most popular during an event of this magnitude, and adjust production as needed.
A network as agile as Lionel Messi
If there’s one thing you can rely on with sports, it’s that you can’t rely on anything. Although the powerhouses are likely to succeed, a surprise team could come out of nowhere and make a deep run in the tournament and create a surge in demand for merchandise, a la Cameroon’s quarterfinal run in 1990. Are you ready to react quickly to changes in demand? Because a last-minute goal could change a team’s destiny, you need to be prepared to launch into action when the unexpected becomes reality. Organisations with cloud-based, connected, real-time supply chain platforms will be ready to meet those needs with the speed required to win.
Making winning connections
Like Torres to Fabregas to Iniesta, the best successes come from great connections. All business units need to be working in unison to reach their goals. Marketing promotions of World-Cup-scale are already in motion. In order for those plans to succeed, they must be synced with supply chain plans. Finance must be ready to back up supply chain production requirements with the necessary capital, and supply and demand plans must work as a team to make sure that every customer goes home happy with that bag of their favorite team’s gear. The best way to build these connections is through an agile, cloud-based, connected platform that brings all these plans into one place.
Just like the team that will eventually hoist the World Cup trophy, winning supply chain teams thrive on solid preparation, agility, and connection. With those pieces in place, organisations will be ready to win big.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”