Project Management

Why Project Management is Crucial in Supply Chain Transformation

As the world economy recovers, companies must insulate their supply chains from systemic risk and disruption. Solid project management makes success in this area possible.

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Why Project Management is Crucial in Supply Chain Transformation

Posted on May 2022 By James Egremont

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As post-pandemic economic recovery gets underway in earnest, it is expected that manufacturers, retailers, and other actors will soon undergo new optimisation and adaptation efforts to put an end to the disruptions currently plaguing their supply chains.

Even prior to the pandemic, many companies had already begun the process of digitisation, decentralisation, and data collection to adapt to changing market conditions. Still, both the pandemic and the continuously changing rules affecting international trade showed that a rethinking of the entire traditional supply chain model is likely needed.

Rather than assuming a stable supply chain landscape moving forward, businesses should assume volatility. Such an assumption suggests the need to build relationships with larger numbers of suppliers for each essential item or material, so that if one link in the chain is broken, another can take its place. Digital transformation will also enable continuous tracking of shipments, so that unexpected delays can be discovered and resolved quickly.

As these types of changes are both delicate and complex, they will need to be applied carefully through the application of excellent organisational standards. In order to succeed in these efforts, and establish more resilient operations going forward, the need for modern project management techniques will be paramount.

How project management can impact your supply chain

The business world is shifting rapidly towards a new set of tech-based practices that include automation, digitisation, AI, robotics, and metadata analysis. These innovative techniques let businesses streamline their existing supply chains, while also expanding those supply chains and addressing material shortages.

Solid project management is critical when carrying out this transformation, and maintaining it. By continuously monitoring personnel performance and shifting resources where appropriate, a well-designed project management system can also help improve internal operational efficiency. Success in these areas will help organisations adapt to and mitigate risks in the supply chain landscape of tomorrow.

The most important aspects of project management in the supply chain are:

  • Risk management. A dedicated system should be put in place to deal with foreseen and unexpected shocks to the supply chain. These may be caused by uneven post-pandemic recovery, local lockdowns, growing social unrest, regional conflicts, logistics bottlenecks, shifting labour pools, supply scarcity, and changes to staffing as a result of the “work-from-home” movement. Market and supply chain volatility are likely to continue for the near-term and companies must adapt to this “new normal”.

  • Resource management. All resources are limited, and project management lets organisations better utilise the materials, equipment, skills, training and information available at any given moment. Focused and decisive action in this area will help ensure timely completion of company goals and objectives. More efficient use also prevents waste, thereby indirectly helping to maintain access to adequate resources for continued operations.

  • Roles, responsibilities, and staffing management. One of the biggest effects of the pandemic on the supply chain involves staff and personnel changes on a scale not seen since the Industrial Revolution. This shift towards remote work and ‘decentralised offices’ shows every sign of continuing even after recovery, as20-25% of office workers in industrialised economies expect to work under some type of hybrid conditions going forward.

This cultural shift will affect everything from office space to business travel, and must be factored into any supply chain strategy. Proper project management can help manage such teams, and even take advantage of the availability of a larger labour pool no longer tied to geography. Enhanced communication tools and flexible employment opportunities can lower company overhead as more work is done remotely.

Elements of effective project management

The added complexity inherent in supply chain transformation only reinforces the need for expert project management. Some crucial elements to consider are:

Scheduling and planning – From regional conflicts driving up resource costs, to local lockdowns slowing production or creating bottlenecks in delivery, to panic-buying and shifting consumer preferences, the trajectory of many companies will be largely determined by how well prepared they are for each new change in the business landscape. With disruption the “new normal”, it is now imperative to build redundancies, backups, and alternatives into the supply chain to deal with new shocks as they come. 

Lean implementation is an excellent way to lower overhead costs, streamline processes, and eliminate unnecessary complexity. Such solutions become possible with thorough scheduling and planning, which increases overall efficiency along the chain.

Quality Systems – Internal waste reduction, alternate packaging solutions, and hybrid work models can reduce pressure on resources. It is now also possible to at least partially predict consumer trends through AI, machine learning, and metadata analysis, which can in turn increase your business resiliency. Other solutions include lowering SKUs and retiring low-performing products and services to focus on higher revenue generating products.

Communication – Remote/hybrid working models have ushered in a wealth of tech-based tools to help staff communicate with each other and across the supply chain. For these efforts to go smoothly, companies should focus on soft skills, a healthy internal culture, and community building – each of which helps to enable the success of decentralised working environments.

Putting the pieces in place

As the world enters the “recovery” phase of the pandemic, companies that are able to adapt and insulate their supply chains from systemic risk and disruption will have a distinct advantage over those that remain passive in a highly volatile environment.

The successful companies of tomorrow will pay close attention to risk and resource management, streamlining and clarifying both roles and responsibilities, and developing new systems to deal with changing staffing issues.

Project management addresses these issues through enhanced scheduling and planning, while also building quality in resilient systems and improving communication across the supply chain. A well-implemented business transformation can unlock access to the resources needed to turn raw material into ready-to-sell products.

Of course, putting so many pieces into place is easier said than done. The right team will be needed to coordinate and maintain such a transformation, and Connexus Global can provide your organisation with the talent to make it happen. Contact us today to learn more.