Can supply chain keep up with a fast-changing consumer market?

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
Warren Buffett The Oracle of Omaha (Investor, economist)

All businesses are a leap in the dark, an intricated, interrelated, unpredictable system of individuals who take coordinated or uncoordinated decisions and put on the table, more or less consciously, the entire spectrum of their competences, money, and ideas to get the most of their investments. With all those unknown factors, who can predict the market direction?

The market is not even a united entity, on the contrary! It can be better represented as a sum of fragmented components at the mercy of global changes or enclosed crisis that, according to economists, tend to a natural equilibrium between what providers supply and what consumers demand. Technological innovation and wars, competitors’ strengths or weaknesses and natural disasters, exchange rates and elections make the market go up and down.

Adopting incisive measures in response to those fluctuations, mostly unpredictable, is a challenge supply chain companies have been facing for the last two decades: the more the market changes, the stronger is the impact on a complex sector as ours.

Tracking the availability of raw materials, optimizing inventory, synchronizing means of transport, respecting delivery schedules, avoiding drawbacks that can lead to production stoppage or blockages at the borders while trying to be tremendously competitive and take advantages of new business opportunities is the norm, but it’s not enough in the fast-changing market era. Nowadays supply chain must be customer-centric first. Yes, because of the factors that most influence the market oscillations is consumers changing preferences.

Purchasers want all now, and they want it as cheap and fast as possible: their trading behavior is influenced on one side by social media, on the other by psychological factors. In the current market customers have more pressure and products have shorter life cycles and they both pretend supply chain to conform to this.

At the same time, supply chain companies must deal with the fact that trends never last for a long time and that anticipating demands for new products, satisfying fast-changing market requests helps in the short term but can be risky in the long term. Keeping high inventories could seem the most advantageous and quicker way to cover demand peaks but, apart from requiring a big amount of space and money, can also lead to a worse trouble: obsolescence. Customers pressure based on online click purchases can be incredibly volatile and predictive analytics on the future of trends in the marketplace are based on features that become old the day after their invention.

Coping with such fast-changing conditions is a high priority for companies that want to emerge or maintain their position within the third-millennium market but adopting selective strategies to satisfy the dictates of a dynamic trading system could require more specific efforts than just implementing qualitative, productive and technological standards.