Your business is complex, so is your supply chain. Businesses purchase products from manufacturers, who in turn obtain materials and components from their distributors, and so the cycle goes on. But it’s important to mention that if somehow one component of the network fails, the entire system can be at risk. Supply chain strategies must be adaptable and powerful enough to assist companies in staying online, managing inventories, and responding to changes.
Disruptions can hit the businesses hard, causing long-term as well as short-term losses. There may be decreased sales, increased system downtime, or delivery delays. As a result of supply chain disruptions, failing to meet customer expectations, may cause customers to lose confidence in the company’s capacity, benevolence, and credibility. It will ultimately result in trust and reputational harm.
However, if your company has proper supply chain management system in place, no matter how difficult the days get, the company’s stability will not be jeopardized.
Three major benefits of having a resilient supply chain mechanism are as under,
The availability of a resilient supply chain is the first advantage. You can access real-time inventory data and adapt to global constraints with quality operating systems. This provides you and your suppliers with peacefulness in the event of unforeseen weather-related incidents or disasters. Even if a blackout occurs at one venue, you can still access the most up-to-date information on your device at the click of a button.
Flexibility is a key to sustainability. There is no way to control unexpected and uncalled-for events, they DO happen, and the organizations must be prepared to deal with them. You have to be ready for anything with original settings from any device using cloud-based software, removing the need to set up a new framework. You may also work with your suppliers to modify the flow of goods based on adjustments you make at your facilities with resilient supply chain management.
To have total control over your business, you must be able to see and know where your inventory is at all times. You will provide a single view of your inventory across your entire network by using cloud-based software and partnering with a third-party logistics provider. You will have more leverage over your company as a result of this exposure.
Do you know how to build a Resilient Supply Chain?
To have a better understanding of how supply chains operate and how easily you can handle potential risks. There are steps you can take to build supply chain resilience, which enables you to anticipate, respond, and recover from unexpected problems. If you are desirous to grow your business stronger with every passing day, you can take any of these simple steps to boost supply chain resilience.
Here are some suggestions,
- Consolidated Risk Management,
You can save time, money, and uncertainty by centralizing the risk monitoring. There are numerous resources on the market that can assist you in monitoring the supply chain and developing a responsible one for different risks. Under that context, the aim is to keep the data consistent and consolidated. You must host your own facility data, supplier data, and third-party risk data in a single location
- Risk Assessment
The first step in your supply chain is a better risk assessment. You must know what risks each of your suppliers poses, how serious these risks are, and what measures you can take to mitigate them? You have to act smartly in protecting your company, by knowing the risks associated with each supplier and their capacity to deal with any unforeseen situation. Then you should make sure they have policies in place to minimize their own risks.
- Broader Overview
To build a resilient supply chain, work with a proactive approach rather than a reactive approach. Just-in-time purchases turn cash flow management upside down, also putting your business in a challenging situation. Organizations often ignore the fact that incentives to save money can also pose a significant risk when they focus on potential short-term gains rather than taking a long-term perspective. Going forward with a proactive approach, you can assess the potential threats efficiently and better analyze whether you are spending more than you should. You will build a better plan for yourself and your suppliers if you look at it from a broader perspective.
- Target-Centric Approach
Once you recognize the potential threats to your supply chain, the next step is to create realistic and efficient risk mitigation strategies. Explaining the term target-centric, means choosing a specific solution for a specific risk. For every A there should be A strategy, for B there should be B strategy. Also, try to find simple, efficient, acceptable, and cost-effective solutions. Keep a close liaison with your suppliers to come up with new ways to minimize risk. There is no such thing as a one-stop solution, which is why you should tailor your approach to your specific needs.
With increasing globalization, any business that has no proper mechanism in place for risk management, and fails to build a resilient supply chain will sooner or later find itself in hot waters.
According to Lemke and Petersen “although the risk mitigation practices of the company have minimized disruptions, the risk to their reputation, as a result of their supply chain, were ignored” Therefore, managing supply chain risk necessitates a detailed understanding of the network’s overall structure.