Recently, supply chains in many businesses have become vulnerable due to uncertainties surrounding the current business environment, like impacts such as the pandemic. Typical supply chains must be flexible enough to respond to harsh changes in the supply and demand of goods.
Having a resilient supply chain can offer social and economic benefits for your business. When the status of a supplier and the flow of goods is monitored well, this can lead to reduced costs and increased returns. Here are five fundamentals of building a resilient supply chain.
Digitize many operational processes
The current supply chain trends relate to the adoption of artificial intelligence and machine learning in supply chain processes. AI has brought about new supply chain processes, including automation. You can leverage the use of algorithms to improve sales performance.
The benefits of automating supply chain processes can outweigh the costs associated with it. Implementing digital practices can enable you to realize immediate and long-term benefits. Digitizing operational processes unlocks large volumes of data in real-time that you can use to make production-related decisions.
Digitizing as many processes as possible can facilitate the achievement of end-to-end transparency. Your supply chain team will have full access to data, leading to improved visibility and full supply chain control.
Engage a crisis management team
The organization of the supply chain is becoming increasingly distributed as teams are mostly working from home. The crisis management team should operate cross-functionally to respond immediately to any supply chain issue. The team should also acquire the necessary technology and be transparent across all operations.
Ordinarily, the crisis management team should put in measures as they anticipate disruptions. Equipping your team with the right technologies and processes will ensure the success of your team.
The team should establish critical supply chain communication channels by updating business development and engaging suppliers and other partners. They also need to continuously update internal supply chain functions to minimize non-productive activities.
Develop a risk management process
Developing a risk management methodology for every warehouse or supply chain node can help you to build a resilient supply chain. Managing supply chain risks requires proper identification and documentation of risks. Your supply chain team should design ways of mapping out and assessing the value chains of products. All supply chain notes, including suppliers, warehouses, plants, and transport logistics systems, should be assessed in detail.
You can build a framework for supply chain risk management as you score risks based on your organization’s preparedness. Use a consistent method of scoring to assess all the supply chain risks. Most importantly, monitor the risk and identify those that can damage your business.
Evaluate and adjust purchasing strategic responsibilities
Transforming the procurement function into a value generation activity and adjusting strategic priorities is key to establishing new business-supplier relationships. This can subsequently align with your business supply chain objective. You can introduce digital purchasing technology to benefit from the social networks of suppliers.
Introducing a digital procurement technology requires you to consider your position in terms of needs. The increase in distance between your business and suppliers may increase, presenting an opportunity for compliance and governance.
Set up a centralized incident management system
Managing crisis in the supply chain influences productivity tools such as emails and spreadsheets because information can be accessed only by a few people at a time. Information may also be sent to several people without a supply chain structure or context. This means that it may not be clear who is accountable for what.
A centralized incident management system can help you capture issues with a clear supply chain and accountability context. A single source of truth facilitates faster problem identification and finding solutions to those problems. It also ensures that all your employees are actively involved in decision-making processes and that they are up-to-date.
An incident management system allows you to identify supply chain risks and deal with weak links. It also allows you to get back to normalcy after the occurrence of an incident to enable you to stay ahead of the competition.
Building a resilient supply chain takes lots of time and effort. Engaging the right supply chain personnel with the right systems and technologies can minimize the disruption of supply chain processes. For a robust supply chain, focus on fundamentals, including dealing with supply chain crisis, and always be up-to-date.
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