Supply chain “masters” are in the best position to turn rising fuel prices from an inhibitor to an opportunity for change, according to the Accenture report, Past the Tipping Point: Record oil prices require new supply chain strategies to enable future high performance. They masters understand the need to re-evaluate the various components of the supply chain. The network is a good starting point. Network analyses and information gathering on a more frequent basis can help rebalance priorities and develop multiple scenarios, the report states. A company’s ability to do this effectively will depend on whether it can:
- analyze flexibility. Identify the trigger points – like fuel price increases – that indicate a need for a strategic shift.
- execute flexibility. Launch the right network changes quickly and in a cost effective manner.
Accenture also suggests companies design more flexible supply chain infrastructures. “It may be necessary to position plants and warehouses to produce and store multiple products, while serving markets in closer proximity,” the report states. Other recommendations include using supply chain analytics, such as cost-to-serve and demanding similar levels of flexibility from product and transportation suppliers.
Sourcing and procurement; planning and forecasting; transportation and distribution are the other areas where change can be implemented. Throughout the report the continual theme is the need for flexibility in every aspect of the supply chain: network strategists can build it into their designs; procurement specialists can demonstrate a willingness to tap into new sources to reduce supply risk. In order to provide consistent economical service to customers during times of flux, transportation and distribution planners also depend on flexibility, and it impacts every decision in planning and forecasting, the report says. Those who are quick to act – these so-called supply chain masters -- will indeed be the high performers while riding the tide of rising gas prices.