Why ‘set and forget’ no longer works in supply chain management

By Daniel Taylor, head of manufacturing, NZTE

As long as people have been doing business, managing supply and demand has been a constant balancing act. Over recent years, we had become used to a highly functioning, ‘set and forget’ global supply chain. Given that it seems inevitable that supply chain challenges will continue in some form or other, what does this mean for manufacturers?

Plenty has been written lately about the impact of supply chain disruption caused by Covid (amongst other things), and what has become patently clear is that if one link in a highly integrated chain breaks, the whole system can become compromised. Set and forget is no longer an option.

We are seeing businesses having to make quick decisions, with imperfect information, in a rapidly changing environment. This has had two major impacts. Firstly, what this has meant in practical terms for many New Zealand businesses has been a change from ‘just in time’ to ‘just in case’ management of both raw materials and finished stock. The reasons behind this change have been many and varied, but have typically included a combination of no longer being able to accurately forecast demand, lack of clarity on freight availability and timing, and the desire to retain enough raw material to maintain production.

Secondly, what has previously flown under the radar due to the well-oiled running of the supply chain is now front and centre for business leaders around the world. Supply chain monitoring and management has become a core function for business leaders and governors like never before, and so for these leaders, understanding the options and implications has become critical.

These changes have led to a need for upskilling across a range of businesses. As I’ve written previously, I believe in the importance of external advice, and given where we are at, supply chain is certainly one place to be looking for that external input and expertise.

You can find more insights, resources and information on supply chain management on myNZTE – if you haven’t already registered it’s free and easy to do so here.

Daniel leads NZTE’s Manufacturing Export Customers team. He has held roles as trade commissioner in Europe and Australia, and NZTE private secretary to the Minister for Economic Development. Before joining NZTE, Daniel was operations manager at Global Fruits. 

The information and opinions within this column are not necessarily the views or opinions of Xpress Engineer NZ, NZ Engineering News or the parent company, Hayley Media.