SupplyChainTalk: Restructuring your supply chain for sustainable growth

On 8 May 2024, Supply Chain Talk host Alastair Charatan was joined by Stewart Morrisey, Senior Director of Supply Chain Operations - Food, The Clorox Company; Mike Loquercio, Senior Manager Supply Chain Technology, Coca-Cola; and Jonathan Ratnasamy, VP Supply Chain, Sysco Canada.

Views on news
One of the most critical factors in any startup’s success is the ability to execute quickly. However, some companies have learned the hard way that fast execution alone is not enough to ensure success. Start-ups also need to balance fast execution with a continuous learning mindset to build a sustainable and successful business. Today, however, we have digital technology available that can help with finding the optimum time to market, as well as understand customer needs. While the focus is on lead times, moving fast and deploying quickly, growing businesses shouldn’t forget about what the article highlights either – learning quickly, which can also help avoid costly investment that won’t bring real value. 

Adjusting sourcing strategies to future growth and SDGs
It’s important to have choice when selecting your suppliers, but you also need to ensure that you don’t limit your capabilities to one supplier or location. Decisions are more informed f you can model how your supply chain works and what the costs are with offshore suppliers v. onshoring – e.g., cost of reshoring versus inventory costs. Nearshoring may be a better choice if there is volatility in demand, while priorities, such as cost, lead time or service may call for different choices. Warehousing is another important factor to consider, as decisions must be made based on an end-to-end view of the supply chain. Shelf life also has a bearing on these decisions, especially in the food sector.

Another area where a balance must be struck is not stocking up too much inventory if there is low demand versus losing revenue if you can’t respond to demand. Meeting temporary need with a temporary warehousing option is viable but that’ll, again, cost the business more. In this case, it must be also considered, whether the need is likely to become permanent and therefore it’s worth making strategic investments to cater for it. A business’s flexibility may be restricted by the fact that it’s not the top priority for its transportation, logistics and distribution provider. However, the least flexible bit is manufacturing capacity, where it’s the hardest to find partners that can top up your manufacturing capacity at the drop of a hat. 

When reshoring, ESGs can become a top criteria and companies will find that there can be tangible benefits to having lower carbon footprints and reducing emissions front and centre when redesigning the supply chain or of increasing recycled content against virgin materials. Rail is a great option for transportation if a business wants to keep its carbon footprint low, but it comes with bottlenecks at getting the goods to and taking them out of the railyard. If goods are delivered with trucks, there are also ways to optimise via route optimisation and using bigger trailers. People and their safety are also key factors of ESG that mustn’t be ignored. 

The panel’s advice

• Flexibility enabling faster delivery to customers comes at a cost, therefore you need to balance it out with other factors.
• Supply chain is a game of trade-offs.
• If you’re selling more, you will move more items, so you need to consider how to get more efficient in order to improve your ESG metrics.