The term “resilient” is widely used now by businesses that are proactively adjusting their supply chain management strategy to avoid any future surprises. So, what exactly is supply chain resilience?
Supply chain resilience plays a vital role in supply chain management by predicting unexpected events like a worldwide pandemic, market trends, and other unseen situations. Supply chain resilience varies from business to business depending on its industry and stakeholders. For instance, if a manufacturer maintained a strong and profitable global supply chain during the recent pandemic, it would be considered to have a high degree of supply chain resilience. On the other hand, a business that experienced a high level of shortages and lost revenue during the pandemic would be considered to have a low degree of supply chain resilience. The degree of resiliency also depends on the size of the inventory. For instance, a business that stores a very high number of inventory items will have a different level of resilience as compared to a business that relies on delivering physical products on a shelf on time.
In order to make your business’ supply chain more robust and resilient consider any of the following strategies:
- Supply chain leaders use inventory buffering in the form of surge capacity for new product launches or expansion into new growth areas. This is arguably the simplest and most effective strategy to enhance resilience, whether in the form of underutilized production facilities or inventory in excess of stock requirements.
- Proactively mitigate supply chain risk by expanding to a diversified manufacturing and supplier strategy. Every business should eliminate the risk of depending on a single manufacturer or supplier in order to build a resilient supply chain. Diversifying manufacturing locations can include combining nearshore and offshore suppliers for each product. This strategy can also include developing regional supply chains that source and distribute products in an identified region. Diversifying suppliers can also reduce the risk.
- Consider being part of an Ecosystem partnership. According to a survey conducted by Gartner, results showed that half of supply chain organizations are using external manufacturers or exploring how they can support product moves, with a similar proportion engaging logistics partners for this purpose. Collaborating with strategic raw material suppliers and external service partners can play a key role in developing a more resilient supply chain.
- Research and invest in the right technological solutions. Investing in smart technology and AI solutions will help any business’ supply chain build a solid foundation. Supply chain technology solutions provide immediate access to real-time data that maximizes inventory management performance. Subscribing to top-notch software allows businesses to always be aware of the market trends by analyzing customer, product and supplier behavior.
Any of the aforementioned strategies can be planned and executed in house as long as you have the internal expertise at your disposal. If it makes more sense to seek outside expertise to assist in protecting your supply chain from future disruptions or unexpected events, then we invite you to learn more about our supply chain solutions by going to www.neverrunout.com. Find out how we solve problems and make heroes.