Watch: Moving From a Reactive to a Proactive Supply Chain

Stop the firefighting! Paul Webb, supply chain industry principal with Coupa, explains how AI and scenario planning can help companies adopt a proactive stance toward future disruptions and uncertainties.

Scenario planning “is the way of the future” for supply chains, Webb says. Businesses need to be able to model their supply chains, and identify how many of their assets are agile and flexible enough to adjust to ever-changing conditions in trade.

“The supply chains of tomorrow are going to be focused on where do I have optionality,” Webb says, adding that businesses will need to be able to work with groups or networks of suppliers to ensure maximum resilience in the face of constant change and disruption.

It’s vital that companies get out of “firefighting mode,” where they’re merely reacting to events as they occur. Scenario planning offers to ability to plan for multiple outcomes, then determine the actual path with the help of input from partners across the supply chain.

Tariffs are a particular challenge for supply chains today, but they’re just one form of potential disruption. By pursuing scenario planning through “connected buyer-supplier relationships,” businesses can detect “early-warning signals that enable you to identify which of the possible outcomes we planned for is the plausible event.”

“The key is identifying critical attributes and dynamics of my supply chain, and how I respond to those,” Webb says.

Artificial intelligence is an essential tool for proper scenario planning and collaboration with suppliers. Digital twin models allow for the construction of virtual supply chains, while natural-language systems describe what’s actually happening in a way that’s comprehensible to the broader base.

The key question for supply chains today, Webb says, is: “In this very disruptive world, how do we disrupt our own future, taking that control into our own hands?”