From Just in Time to Just in Case: The Shift in Logistics Being Made by the World’s Top Companies

Karen Clarke, Managing Director, Anaplan APAC | 25 January 2022

Avoiding disruption in the new Supply Chain

Karen Clarke, Managing Director, Anaplan APAC

“In with the new and out with the old” is a popular Chinese saying that is synonymous with the spring cleaning of homes and buying of new clothes during the Lunar New Year season – traditionally the most important holiday of the year for Chinese communities worldwide. However, supply chain delays that continues to persist worldwide, could be frustrating for Asian families looking to get new clothes and furniture in time for the upcoming festive season. Just last year, companies like Apple and Amazon have already cut their projected earnings for the Christmas holidays, following huge losses in Q3 due to supply chain problems. Anyone in Asia who ordered a new iPhone or iPad back in November for the Christmas season would only receive the shipment in 2022 — a rare occurrence for the distribution mavericks at Apple who typically get products in the hands of customers in a timely manner and historically have been consistently placed in Gartner’s Supply Chain Top 25 since 2013.

In the west, we witnessed the supply chain warning of a shortage of small turkeys as families celebrated Thanksgiving only with their immediate family members due to ongoing pandemic concerns. We could see a similar occurrence here in Asia, where the Lunar New Year celebration is a significantly scaled down version from pre-pandemic times.

The issues most consumers experienced during Christmas could unfortunately just be a dress rehearsal for further supply challenges during the upcoming Lunar New Year celebrated throughout Asia from February 1 onwards. Typically, across China, factories are closed and capacity across the supply chain is drastically reduced as Chinese everywhere take time off to celebrate this most important festive season. While the long break during the Lunar New Year typically results in some disruption in the supply chain every year, the coming one will have serious ramifications to an already-traumatized supply chain and global freight market likely be felt well into the second quarter of the new year and beyond.

What does planning ahead mean in these uncertain times?

While it may seem that better connectivity across the supply chain and knowing “where my stuff is” are obvious answers, solving it is a Herculean task. That’s because many companies in the supply chain ecosystem in Asia still rely largely on legacy technology.

Today, many procurement planning teams still rely on business intelligence software to aggregate invoices and look at historical costs. Even before the pandemic hit, the limitations of these outdated platforms were obvious and had been challenged by factors like weather, oil prices, and changing customer trends. Today, there is no doubt that companies have hit the ceiling with these legacy applications, given the unpredictable consumer demand in the last two years combined with historical data becoming increasingly useless in demand-sensing and forecasting.

In an Anaplan-commissioned 2021 supply chain survey conducted by Reuters, approximately 60 percent of respondents said ‘they classed digitally transforming their operations as the “highest priority right now”.’ Indeed, the visibility companies have, typically reflects a lag of over a week. Companies today need to see even further, with daily or even intra-day visibility to give them a handle on better risk management and alternative sourcing arrangements. Just seeing problems coming—forwards to customers and backwards to suppliers and logistics—is not enough.

In fact, if the last few months have demonstrated anything, it’s that companies that have largely been reactive, transactional, and operating on a “what happened” mentality now face the vulnerabilities from their inability to act or pivot. They need to help their peers and partners understand that as much data as they appear to get from legacy systems, they need to digitalize completely to harness global supply chain data, and get real-time, multi-enterprise collaboration to drive actionable insight. That’s because as important as visibility is, companies need the agility to understand the implications and act. The Reuters survey revealed that approximately 20 percent of respondents indicated they were ‘data rich but insight poor’.

Given the amount of uncertainty, the ability to connect, share and collaborate with suppliers and partners can help companies enhance their operations, identify bottlenecks and embark on scenario-based planning—to become proactive, and switch from a “what happened” to “what if” mentality. The onus is on supply chain leaders today to plan for just in case, not just in time.

They can start by relying on connected platforms built for the supply chain and supporting ecosystems, so that they can approach their business operations in multi-faceted ways and anticipate the problems of tomorrow. Anaplan on Google Cloud, for instance, features a “supply chain twin” a virtual representation of their physical supply chain–by orchestrating data from disparate sources to get a more complete view of suppliers, inventories, and other information.

As the supply chains of yester-year continue to metastasize and the rippling impact is felt even during the happiest time of the year and the upcoming Lunar New Year, one thing is clear: consumers’ wallets and spending will take a beating, and so will businesses if they can’t fix the supply chain.

It’s time key decision makers across the logistics sector started challenging the status quo. While change is difficult for any industry, let alone one that’s been knee-deep in problems for so long, the good news is we are more ready than ever to tackle them. We simply need more business leaders to be better prepared to respond in timely fashion to emerging demand signals, to help them align their resources accordingly. In the spirit of the new Lunar Year, it is perhaps time for the supply chain to adopt an approach that promises to be “in with the new”, stay ahead of the competition, and be more than ready to confidently tackle volatility.

Karen Clarke, Managing Director, Anaplan APAC

Karen Clarke is Managing Director of Anaplan Asia-Pacific, based in Singapore. She leads and sustains business growth across Australia, New Zealand, Japan, India, North and South Asia. She was formerly VP for Northern Europe.

Previously, Karen spent 20 years at Oracle, in various leadership roles across the EMEA region.

Karen has a keen interest in women’s leadership, digital, and STEM skills development. She has held non-executive director and business advisory roles to software start-ups.