Supply chain disruptions of any scale for any business can have a tremendous impact on their operations.
The recent supply chain disruption due to the widespread of the recent pandemic had devastating impacts. This has led enterprises globally to start considering supply chain resilience as one of the top priorities.
Enterprises need to determine the business goals and invest in supply chain resiliency to have minimum impact, respond and recover quickly from disruptions. The businesses that embraced resiliency way before the pandemic had the least impact on their operations than those that were unprepared.
CIOs should consider developing a robust supply chain resilience strategy to prepare their business for the next disruption, irrespective of the magnitude. Here are a few tips to embrace supply chain resilience to prevent the next disruption:
Determine the supply chain pain points
CIOs should consider developing a point of contact to consolidate organizational responses. A diverse team with various skill sets will help to effectively coordinate and manage proactive responses to concerns that might create a major disruption in the supply chain. The supply chain disruption response team should have resources, operation capabilities, decision-making tools, and a robust threat detection system. These threat detection tools should be developed in a way it tracks and notifies potential political developments, cyber-threats, compliance, or regulatory risks that can disrupt the supply chain.
Feign a worse supply chain disruption
Simulating extreme supply chain disruptions can help organizations identify the potential threats and create a resilient plan to have minimum impact. Enterprises should consider procuring raw materials earlier than usual and creating a production plan that has breathing space for delivery to streamline the process. Moreover, they can also have backup plans with better energy, material, and transportation alternatives to overcome the disruption of all sizes and types. Evaluating the stock of critical inventory regularly and procuring it beforehand will help to minimize shortage occurrence.
If the organization predicts a logistics disruption, finding alternative routes with better capacity will minimize the impact. Enterprises that do not want to overstock their inventory can simulate the influence of regional demand shifts on production and develop a supply chain resilience approach accordingly to avoid the excess stock. It is crucial to evaluate the risks in supplier networks, labor, manufacturing, and delivery in the entire value chain to identify potential threats exposed to internal or external disruptions. Businesses need to deploy robust controls to minimize their impact and ensure continuity.
Analyze just-in-time inventory strategies
It is challenging to predict the magnitude of the next supply chain disruption. As experienced in the past, with a surge of the pandemic globally, a lack of backup stock or raw materials had a devastating impact on the supply chain. One of the major reasons for supply shortages is less visibility in supplier sub-tiers. Enterprises can spot suppliers from spending data, n-tier mapping, or both to get more visibility in the first tier and their sub-tiers suppliers. Prioritizing suppliers based on their importance and analyzing their vulnerabilities will assist businesses in taking necessary actions to prevent disruption because of the vendor.
Once all the suppliers are evaluated for their vulnerabilities, organizations can implement potential measures to mitigate the risk, such as finding new suppliers, restructuring networks, redesigning inventory targets, maintaining safety records, and embracing a circular economy.