Truist Business Lifecycle Advisory centers on knowing your business needs at each stage and bringing you resources to help meet your goals. Your Truist relationship manager, alongside a network of industry specialists, can provide strategic advice and actionable insights to help you optimize your supply chain and stay competitive in your industry.
Here are three strategies to explore with them.
1. Hone your forecasting capabilities.
Correctly forecasting demand is the key to keeping your supply chain running smoothly. By using historical sales data supported by insights from your Truist relationship manager and their team, you can optimize inventory levels and enhance overall operational efficiency. This gives you the agility to respond to changing market conditions and allows you to avoid disruptions in your supply chain.
International fashion company Zara uses demand forecasting as a competitive differentiator in the fast fashion market. Customers trust that they can find the latest fashions at Zara, which means the company must be on top of emerging trends. To do this, Zara only forecasts trends between two and six weeks in advance. Their business model depends on these predictions being highly accurate—and they are. Zara can respond, almost in real time, to evolving fashion trends, which is how they sell about 85% of their inventory at full price, versus the industry average of only 60%.Disclosure 2
“Forecasting demand as accurately as possible is critical to maintaining an efficient and effective supply chain,” says Burada. “Overstocking ties up capital and inflates your storage costs, but if you run out of inventory, you lose that sale.”
2. Build a diverse network of suppliers.
Having robust relationships with several suppliers better prepares you to manage any regionally specific disruptions—such as political instability, natural disasters, or local shortages. It also prevents you from being overly reliant on one or two suppliers for key components of your product or service.
"As you consider different supply chain partners, it’s important to look both globally and locally,” says Burada. “Creating a diverse network allows you to mitigate risk, optimize costs, and enhance responsiveness, giving you a balanced approach to cost, quality, and speed.”
For example, KPMG reported that more than 70% of businesses moved production to Asia between 2018 and 2023 to capitalize on the cost reduction and risk mitigation benefits.Disclosure 3 While that may have cost advantages, it can also create challenges if overseas shipping is delayed for any reason. Relationships with local suppliers can provide access to deeper market insights and quicker response times.
Also, be sure to source multiple partnerships for each step in your supply chain. This is particularly important for well-established businesses, which often have complex operations. Having multiple manufacturing partners may ensure you don’t have production delays. However, if you haven’t also diversified your transportation partners, you could still see a disruption in your supply chain if inventory is held up in transit.
3. Leverage real-time data.
According to a McKinsey survey, 67% of companies that monitored their supply chains with digital tools were able to sidestep market disruptions in the first half of 2022.Disclosure 4 Technology can provide real-time visibility into your supply chain while also helping you monitor inventory levels, track shipments, predict demand fluctuations, and identify potential bottlenecks. Such data-driven insights improve your ability to make informed decisions, minimize the impact of disruptions, and optimize your resource allocation.
Your Truist relationship manager can consult with an industry specialist to see how your data compares with others in your industry and what trends may affect your numbers in the future.
You can also use this data to streamline tasks that are traditionally more labor intensive, such as reconciliation, settlement, and reporting processes. Having real-time data can reduce the time and effort required for end-of-day closings, improve reporting accuracy, and enable faster response times to discrepancies.
Michael Hill, an international jewelry brand with nearly 300 stores, onboarded a digital solution that helped them continue operating during the pandemic, even when many of their physical stores were forced to close. Using this digital tool, the company could more accurately track the location of inventory across its network of stores. This made it easy for customers to pick up their online purchases or have them shipped directly to their homes.Disclosure 5
The importance of a regular supply chain review
Supply chain disruptions won’t always be of pandemic proportions. Natural disasters, labor shortages, cyberattacks, and geopolitical changes can all wreak havoc on supply chains. Truist specialists say even if things seem to be operating efficiently, it’s a good idea to review your supply chain at least once a year for any potential optimizations.
“Take a hard look at every link in your supply chain and consider any potential vulnerabilities and risk mitigation strategies,” says Burada.
For example, a supplier with poor data security could be vulnerable to hackers. Or a supplier located in a volatile political climate could be sensitive to upheavals. It’s also important to examine your suppliers’ financial, reputational, and operational standing.
“Since you never know when—or why—a disruption will happen, it’s important to stay in tune with the health of your supply chain,” says Burada. “Your Truist relationship manager can partner with you to find the strategic moves that will help your company stay agile and resilient in the face of any disruption.”
