Every year, an increasing number of companies experience serious damages. The current economic environment raises the risk of your suppliers going out of business, which could have a significant effect on your business performance and productivity.
Since there is no historical evidence, predictive statistical tools cannot be used to help ensure risk containment. Moreover, there is no sure way to overcome all such risks, particularly high-impact events with low probability like outbreaks, natural disasters, or a major terrorist attack.
That being said, some companies deal with the prospect and potential unknowable danger much better than others. Do they have some secret recipe to survive those threats?? Absolutely not, but they do have one thing in common: resilience.
In recent times, supply chain resilience includes not only risk control but also the ability to handle risk better than competitors and also finding ways to even benefit from these disruptions.
With a resilient supply chain, the objective of providing on-time performance becomes more practical and achievable. But, more importantly, it helps an organization anticipate challenges even before they happen.
While building a resilient supply chain,
Track and Monitor:
Keep an eye on the supply chain at all times. It’s important because certain supplies are critical to keeping production running smoothly. If a situation arises where you are unable to obtain them, it will have a significant impact on your business efficiency. Therefore, you can anticipate when your supply chain will be interrupted with accurate tracking and monitoring.
- Keep an eye on the flow of critical materials to your suppliers, particularly if they are sourcing materials or products from other sources.
- Keep track of how well your main suppliers are doing against your demands. Contact them if you foresee any problem.
- Take note of any variations in the quality of products purchased, delays in receiving orders, or order errors.
Make Risk Assessment:
The importance of responsiveness and pace cannot be overstated. Conduct a risk assessment for supply chain network stakeholders such as manufacturers and distributors and logistic suppliers. Keep an eye on changing and fluctuating demand and inventory levels. It is important to detect any loopholes in production capacity, supply management, or any transportation and warehousing issue. To lessen the effect of disasters, large organizations develop action plans based on scenario analysis.
From suppliers to end-users, businesses should devise a supply chain network and methodology to evaluate risk. Risk, which can be on any level including supplier, manufacturer, warehouse, or transportation.
Implement Automated Manufacturing
Today’s technology provides more mobility and collaboration. Automation always brings efficiency to the business. Implement a robust manufacturing excellence program, it will reduce your dependency on labor-intensive processes. It will bring innovation in routine work and increase efficiency as well as reducing the burden of relying on individuals. It’s needless to mention that a digital operation competitively runs more smoothly.
Adopt Digital Procurement Strategies
Procurement is a critical activity for every business, make it meaningful by performing frequent assessments. It is important to establish strategic goals by strengthening new relations with suppliers that are in line with the business’s overall supply chain goal. Take advantage of the fact that suppliers have a large social network, companies should go fordigital procurement technologies.
Dealing with Supply Chain Disruptions
Your company’s culture would have a powerful effect on your ability to adapt, recover, and benefit from a crisis. The following are characteristics of a company culture that can help you recover faster:
By keeping the communication open: Keep the whole team up to date on the challenges that your company is facing. They will be able to use the knowledge to make informed choices in an unpredictable world as a result of this. Be open and frank with your employees; if they understand the issues, they will assist you in identifying the root causes that may affect your main suppliers, as well as possible solutions.
By empowering your staff: Empower workers to take action when they see a problem. Empower teams and people to take action when they notice problems. Quick intervention increases the likelihood of a company taking corrective action early on, preventing problems from worsening.
By welcoming new opportunities: Always be open and welcoming to innovation. Look for alternative ways to increase productivity. Attempt to strengthen and innovate the processes. Be flexible and open-minded when it comes to new ways of operating or finding new suppliers.
While disruptions and unforeseen events are beyond your direct control, particularly if you depend on other businesses for supplies, take precautions to minimize the negative effects they can have on your ability to source essential supplies.
The world is evolving at a rapid pace, and the business world is no exception. Faced with this ever-increasing globalization, every business must have a resilient supply chain to thrive and survive.