Building Your Supply Chain for Resiliency
Our global supply chains have been tested repeatedly over the last few years with the pandemic, the Suez Canal disaster, and political unrest in various regions disrupting normal operations. There are many consequences to these disturbances, from unhappy customers, to delays in production, to lost revenue. It’s time to address this new normal and build supply chains that can navigate delays and surprises.
Here are some of the common issues that businesses face and solutions to protect their processes and make their systems more resilient.
Common supply chain issues
While there are many kinds of disruptions, these challenges have the potential to seriously interfere with your enterprise.
The need for usable data
Data is a powerful tool and absolutely critical to managing your supply chain effectively but only 9% of companies actually use data collection software. The important information that enables effective decision making can no longer be collected through manual processes. This is why technologies like AI, IoT, and analytics software are vital to agility in your management team and supply chain system.
Logistics challenges in Supply Chain management
Supply chain logistics have made significant improvements in recent years but with compounding global issues, businesses face complex challenges to seamlessly get their products to consumers. Even as supply chains improve and expand, it’s impossible to predict the next global disruption. And these disruptions have a far-reaching impact on businesses and customers worldwide. This can cause a variety of issues to deal with from excess products filling up warehouses to product shortages that halt delivery altogether.
These issues can lead to financial losses and frustrated customers, but enterprises can implement new strategies to protect themselves. Options like alternative storage facilities, different supply chains, and updated last-mile delivery strategies can all help to alleviate problems and keep your supply chain agile.
Working with third parties
One of the reasons businesses struggled during the COVID-19 pandemic was by working with only a few large partners. When delays occurred, they were stuck without alternative options and faced with major delays of goods and materials.
By exploring new trading partnerships, businesses can avoid the problem of relying on one vendor alone and increase their options if they encounter a shortage of goods. There are, however, risks that should be considered when looking for new partnerships like cybersecurity compliance and counterfeit goods so care should be taken when developing any new alliance.
Storing and transporting goods can be a major expense, which is why companies often use the “just-in-time” model for their inventory. This means that goods only move when a customer has requested them. While this method works well for minimizing expenses, it puts businesses in a precarious position when there’s a disruption in the supply chain.
The digitalization of your supply chain can be a step towards stability, especially since it provides a reliable overview of products and helps to manage any third-party partnerships. This detailed view empowers leaders to make informed decisions about stocks with accuracy and precision.
Implementing your supply chain resiliency
The key to surviving supply chain disruptions is the ability to respond quickly and create a system with long-term sustainability.
Here are the top five ways to make your supply chain reliant:
Review your current supply chain
Work through your entire process before you put it into action. As you go, identify as many new suppliers and channels as possible. This is especially important for the supply chain stages most critical to your products.
Test your scenarios
Before making any changes, run tests on your supply chains to make sure that you’re achieving the results you’re after. Be particularly vigilant about the most vulnerable areas of your supply chains and remember that these should be highly detailed so you can detect and anticipate potential problems.
Use data transparency with trusted partners
To optimize your supply chain, utilize data transparency with your partners. This extra communication can facilitate better decision-making and help to reduce the costs of warehousing and transportation.
Diversify your supply chain network
Minimize risks and delays by collaborating with multiple suppliers. Even for the same product in the same region, multiple partners can open new transport options when it matters most. It’s a key piece in creating a sustainable supply chain.
Digitalize your processes
Data can differentiate your business from your competition. By removing as many manual processes as possible, and implementing data technology solutions, you’ll be able to work quickly where manual data processing could put you further behind.
The pandemic has changed the supply chain management permanently and we will continue to see disruptions and challenges. However, it is possible to be prepared and armed with tools and processes to navigate the new supply chain. The best way to protect your company is to transform your systems, data, and partnerships to create a sustainable and resilient supply chain system. With up-to-date data, and a variety of alternative logistical options available, you can respond and adjust when disruptions inevitably occur.