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Get in touchSupply chain resilience is a critical factor for success
How can we identify potential exposures to implement best practices and build logistics resilience?
It makes sense for businesses in every sector to carefully balance supply and demand for their goods and services. In a global economy, buyers, sellers, suppliers, retailers, producers and shippers all form a complex, interconnected supply chain.
The essential factors for success are keeping costs down, timings tight, inventories low, and customer satisfaction high.
The challenge in this ‘just enough, just in time’ world is that when the carefully managed balance between cost and performance is disrupted, the effects can be severe. Against this backdrop, business resilience becomes a crucial factor not just for success but for survival.
This article looks at what resilience means for integrated logistics teams and technology and where potential exposure points can be found in the supply chain. We also explore what best practice means in the context of supply chain management.
What does resilience really mean?
We all have a good idea of what a resilient individual is like—someone with a resolute, calm, positive and proactive attitude. For business, the story is somewhat different.
Gartner describes business resilience as the ability to adapt to structural changes by modifying supply chain strategies, products and technologies.
It doesn’t sound quite as admirable as the individual’s traits, but beneath that definition is a multitude of layers made up of business insight, anticipation, planning, clarity, quick thinking, collaboration and the right technology.
When these attributes are integrated into a supply chain strategy, every business can quickly and dynamically prevent and deal with disruption.
Why resilience matters
From natural disasters to regulatory changes to sanctions - disruptions to the supply chain can be many and varied. However, the risks they constitute for a business are undeniable.
Increased shipping costs, failure to deliver orders on time, lost sales, and shortages of components and raw materials all reverberate throughout a business.
With the right tools, processes, mindset and experience in place, resilience enables a business to keep inventory at efficient levels and fulfil orders on time and in full.
A fortified supply chain offers more opportunities for teams to act fast to prevent disruption and activate recovery in parallel, such as planning for increased sales, reducing lead times, streamlining inventory costs, and improving cash flow.
What does a resilient supply chain look like?
From natural disasters to regulatory changes to sanctions - disruptions to the supply chain can be many and varied. However, the risks they constitute for a business are undeniable.
Increased shipping costs, failure to deliver orders on time, lost sales, and shortages of components and raw materials all reverberate throughout a business.
In practical terms, when disruption occurs, logistics and supply chain teams will know where shipments are. They will be able to identify what risk they may be subject to and then use data to define and decide how to manage the disruption.
From a team point of view, you need to have experienced people supplied with the right information to anticipate and resolve disruptions. This takes strong leadership, empowered teams, continuous learning and development, proactive problem-solving mindsets, and strong end-to-end collaborative relationships with supply chain partners.
Proactive disruption management
So, the theory and elements of supply chain resilience are established, but what does best practice look like, and what steps can you take to start building better resilience?
It’s important to know what options are available. Have the data and processes for handling disruption not just documented but communicated to all stakeholders, so they know where to source, what partners to turn to, what routes to switch to and what equipment you’ll need.
Prepare your crisis response in advance and have them designed into agile workflows so that roles, responsibilities and actions become second nature in a crisis. Ally these with clear, concise crisis communication processes.
It is vital to act quickly and decisively when disruption occurs. It is also key to establish the right balance between rapid response and hasty actions. Establish trigger points for actions, and ensure your teams know both what’s expected in terms of reaction times and when the right time to escalate plans is. The key is to act fast, act soundly.
Key takeaways on resilience
for supply chain managers