Author: Nathan Goldstein
As we head into the second half of the year, I’d like to reflect on the lessons learned from my conversations with hundreds of supply chain leaders in the manufacturing, pharma, and CPG space. What they have in common is that they are facing three significant challenges:
Challenge 1: Managing Disrupted Networks
The first major challenge is managing disrupted networks. Supply chain leaders must navigate high-impact disruptions in product flows, balancing costs, risks, and service levels. However, traditional tools provide limited ability to quantify and optimize trade-offs among multiple business objectives. This limitation can result in increased costs, decreased service levels, and significant revenue losses. In an environment where disruptions are becoming the norm rather than the exception, robust tools and strategies are essential.
Challenge 2: Maximizing Return on Assets
The second challenge revolves around maximizing return on assets. Rampant inflation and high interest rates are putting immense pressure on businesses to maximize their return on assets. Supply chain leaders must enhance the financial fidelity supporting their network capacity decisions. Traditional tools often fail to distinguish between fixed and variable costs, leading to a decrease in Return on Invested Capital (ROIC) and an increase in Internal Rate of Return (IRR). Optimizing asset utilization in a financially prudent manner is crucial to maintaining profitability and competitiveness.
Challenge 3: Integrating Sustainability
The third challenge is integrating sustainability into supply chain operations. In 2024, sustainability is a crucial factor in modern network design. Supply chain leaders must incorporate sustainability targets, constraints, and costs into their network design process. Yet again, traditional tools cannot model and optimize complex carbon emission/credit variables. The risk of not integrating sustainability into the end-to-end strategy includes barriers to capital access and higher capital costs. As consumers and investors increasingly prioritize sustainability, aligning supply chain strategies with environmental goals is no longer optional but essential for long-term success.
The Solution: River Logic’s Value Chain Optimization (VCO)
To help supply chain leaders face these unprecedented challenges, River Logic has designed the Value Chain Optimization (VCO) solution. VCO is a comprehensive solution designed to quantify and optimize the full potential of your current and future network. Unlike traditional tools, VCO expands the scope of network design beyond the traditional transportation and logistics focus. It provides insights that ensure supply chain strategy aligns with financial and sustainability corporate objectives.
If you relate to one or all of these challenges, contact River Logic today. We have a proven track record of helping organizations like yours overcome these challenges and more. We’re here to help you navigate the complexities of modern supply chain strategy.
Watch the video to learn more and discover how to transform your supply chain strategy to meet the demands of 2024 and beyond. Don’t let these challenges hinder your progress; equip your business with the tools and insights necessary for success.
