Building Industry-Focused Solutions
Based on the magnitude of challenges that industries face, we need something that incorporates innovation and takes us from just-in-time to just-in-case strategies. It’s time for supply chain reimagination.
Every company is trying hard to fix its own supply chain problems. Because of the plethora of challenges companies face, it might be time to build industry-focused supply chain strategies.
It’s hard to imagine any context where one company can address surging demand, container shortages, port bottlenecks, and other disruptions. The door is wide open for new and different perspectives and a prudent move away from just-in-time approaches to industry integrated approaches that incorporate just-in-case strategies.
From a holistic perspective, industries already have the capacity to build their own structural frameworks. They could unite their own supply chains, study points of failure, and develop pre-competitive strategies that help build durable and resilient supply chains. These strategies could center around logistics, technology, and transportation concerns and address macro policy issues that would impede application of supply chain solutions.
This approach is not far-fetched. CNBC reports that American Eagle has developed a new strategy to compete with Amazon: reinventing its supply chain strategy through a proposed “frenemy network” of vertical logistics.
American Eagle built out a logistics platform that others in the apparel industry can use. Shekar Natarajan, chief supply chain officer at American Eagle, leads the effort. Nearly 50 other companies use the platform and Natarajan is seeking to add 200 brands. Few would have envisioned this approach over the past decade.
Trade Associations Play a Part
There are other approaches to building strategic partnerships between industries and their trade associations to deliver pre-competitive solutions. These organizations have the capacity to build their own structural frameworks and include companies throughout the supply chains in all deliberations.
Trade associations could lead and convene industry supply chains and serve as neutral data and knowledge integrators that gather information on points of supply chain failure. Notably, trade associations can use their advocacy efforts to deliver policy solutions that help assure implementation of resilient supply chain solutions.
The recreational boating industry has its own strategic partnership and built a durable ecosystem with their trade association. The National Marine Manufacturers Association, which includes industry suppliers, manufacturers and retailers, partners with the recreational boating industry. They build industry solutions and, through their ecosystem, shape the external environment and implement strategies that achieve accretive growth.
Through a collaborative effort, the recreational boating industry achieved a 20% year over year (2019 to 2020) increase in revenue. Structural frameworks like these could incorporate companies throughout the industry supply chain including logistics, transportation, and technology.
Strategic partnerships have unlimited opportunities when it comes to supply chain solutions, from developing industry fail-safe options to where and how to store excess parts and goods in the next national emergency. Other opportunities could include how industries reshore or nearshore production. These same partnerships have the capacity to work with transportation authorities to secure the necessary transportation or rail infrastructure to move goods.
Every company wants to build its own resilient supply chain in a time when we need industry solutions. Based on the magnitude of challenges that industries face, we need something that incorporates innovation and takes us from just-in-time to just-in-case strategies. It’s time for supply chain reimagination.