Building Supply Chain
Resiliance
How resilient is your supply chain?
When we talk about supply chain resilience we are referring to the ability of a supply chain to quickly adapt and recover from disruptions or unexpected events, something that is more common place today than it has ever been. So, finding ways to make your supply chain more resilient, and better equipped to handle the unexpected is critically important.
Here are some of the keyways to improve supply chain resilience:
Diversify suppliers: Relying on a single supplier can increase the risk of supply chain disruptions. This has been seen repeatedly over the last few years with disruption from the COVID 19 Pandemic, as well as trade wars (in particular between the USA and China). This has led to many companies switching some or even all manufacturing away from China to protect their ability to supply customers consistently. By diversifying suppliers and sourcing locations, companies can reduce the impact of disruptions in one location or with one supplier. Business continuity planning has never been more important.
Build redundancy: Building redundancy into the supply chain, such as maintaining safety stocks, having backup suppliers, or implementing redundant logistics systems, can help companies quickly recover from disruptions. For many years the focus on international supply chains was ‘Lean’. This is a great way to strip cost out of a supply chain to provide your goods at the lowest cost price. The issue with being lean is that your supply chain will have little or no redundancy, therefore it has very little flexibility to cope with change. It is not agile, so unable to cope or shift to manage the unexpected. Of course, there is a cost to building redundancy, so finding the balance between cost and resilience is an important exercise to complete. Different industries in different markets will require different solutions and different levels of redundancy.
Increase visibility: What you can see, can be managed. If you have sections of your supply chain that is not visible in real time you are at risk of incurring delays and not knowing about it until a timeline trigger is missed. Waiting for this to be triggered could leave you weeks behind plan. Improving supply chain visibility can help companies detect and respond to disruptions more quickly. This can be achieved using technology, such as real-time tracking systems, good process, and by establishing close relationships with suppliers and logistics partners.
Improve risk management: Companies should identify and assess risks to their supply chain and develop strategies to mitigate those risks. This can involve conducting regular risk assessments, developing contingency plans, and regularly reviewing and updating those plans. Having this insight allows you to understand your level of risk and build appropriate business contingency plans to support you and your customers in the event of a problem. Seeing the issues is one important step but having a plan to enact quickly and in a controlled manner, can make a significant difference.
Invest in technology: Appropriate technology can help improve supply chain resilience by providing real-time data, automating processes, and improving communication and collaboration between stakeholders in the supply chain. It can mitigate the risk of labour shortages and drive improved productivity and accuracy. However, it is important that this is done utilising experienced independent expertise. Automating unnecessarily or using the wrong solutions can create significant issues through a loss of flexibility and performance, leaving you less resilient. Automation done well transforms operations and supply chains. Use independent expertise to prevent being over sold solutions.
Foster collaboration: Collaboration between supply chain partners can help improve resilience by sharing knowledge, resources, and best practices. This can involve establishing partnerships or alliances with suppliers and logistics partners or participating in industry associations or forums. Your internal collaborations are equally as important, building strong, open, relationships across your own business are critical in the modern supply chain. Many hurdles to a well performing supply chain sit within your own organisation. Take the time to ensure your internal colleagues understand their impact on performance, and how by working together openly, and collaboratively can bring your supply chain to the next level.
For support in assessing your supply chain resilience, or building strategies, and development program’s to drive greater supply chain resilience and performance, get in touch using the button below.