Amid the Covid-19 pandemic, there have been disruptions in global supply chains and many professionals have searched for answers to vital questions. With the nature of supply chains, which involves the flow of goods or materials from production to the final consumer, it is fair to say that disruptions are inevitable during this pandemic. Only resilient supply chains bounce back from disruptions. So, is your supply chain resilient? If not, how can you achieve supply chain resilience?
Supply Chain resilience is the ability of a supply chain to be prepared for unforeseen situations, how it responds to and recovers from disruptions and makes a quick return to it’s original state or probably grow to a new state in order to improve performance.
Will you achieve supply chain resilience if you become leaner? How about developing a robust supply chain? …Will that help? Too many questions right?
With several parts of the world in lockdown or not in full operations at the moment, many companies and organisations are experiencing high instability which is causing reduced profitability, decreased productivity, redundancy and leaving people out of work. Business leaders and Supply chain professionals all over the world have to step in and begin to ensure resilient supply chains.
I will go on to answer the question. Do you need a lean or robust supply chain to achieve resilience? Due to ever-growing global supply chain complexities, I’d say you need a robust one. Remember that a robust supply chain doesn’t necessarily mean one with waste.
Robust supply chains
A robust supply chain is one that minimises disruptions and this is so because it is built to be consistent. The consistency is due to structuring in order to identify the right balance between manufacturing, Inventory levels and distribution. The following may help to build robust supply chains;
• Diversification – have a large pool of local and international suppliers with well coordinated logistics networks. This will cause healthy competition amongst the suppliers. Also, narrow supply chains are fragile and easily disrupted while wider or diverse supply chains have stronger staying powers, are more successful and affect bottom-line positively.
• Data-driven Supply Chains – This is the 21st century. This is the digital age. Are you about to make a decision and it’s not data driven? Please don’t. By the way, when I say data… I mean good data. Work with good data. Without it, you will have lots of irregularities with your suppliers, plants, stakeholders and your finance. Top secret... supply chain management is an information-based activity. Good data is required in advanced forecasting. This reduces the possibility for under-stocking or overstocking. When this is implemented you won’t have to bother about increased freight costs for last-minute Logistics.
• Flexibility – Operational Flexibility engulfs mix and volume. Set up your supply chains to adjust easily. When the demand is high, you boost production effortlessly and when demand is low, you effortlessly scale back as well. This can be accomplished through master scheduling, requirements planning, schedule coordination, demand management, contingency planning and quick response.
• Embrace Integrated Systems and Partnerships – The digital age has presented opportunities for us to implement sophisticated software solutions which help in simplifying and standardising supply chain processes. These systems ensure close coordination and communication with internal and external stakeholders. Furthermore, optimal use of these systems increase process efficiency, reduces work monotony and is effectual in error management.
• Visibility – there is a growing need for visible and transparent supply chains all over the world. This is one of the reasons for the implementation and advocacy for omnichannel supply chains. Supply Chain visibility promotes real-time tracking and informed decision making. Additionally, it builds customer trust, increases profitability, productivity and supply chain sustainability.
Risk management
The negative events caused by disruptions were once supply chain risks. Managing these risks involves identifying, analysis and ranking of risks which is then ensued by the deployment of resources to control, mitigate and monitor the probability and impact of these risks. Risk management is key to achieving supply chain resilience and should be more of a mindset than a process. It is also always more proactive than reactive as the first major steps point towards preparedness.
Disruptions will continue to affect global businesses and cause a devastating set of limitations for unprepared and fragile supply chains but resilient supply chains will always be presented with opportunities which they will exploit quickly.
As we continue to advocate for digital supply chains while discussing resilience, its noteworthy that interpersonal relationships and strategies are still a huge part of supply chain success as these software systems aren’t built to fully eliminate or obliterate human interaction.
