How to Overcome Supply Chain Disruption
The supply chain features countless moving parts. Any minor supply chain disruption can threaten the entire system. Any shifts that harm any aspect of the supply chain are a disruption or challenge. In recent years, supply chains have faced massive disruptions. With everyone feeling the impact, getting back to normal is almost impossible. The only new normal we create is that which we design collectively. It will take an approach that capitalizes on different factors to address these disruptions. These include advanced technologies and a business ecosystem that networks individuals. It also requires a marketplace approach built on the power of networking.
Natural disasters, pandemics, cyber-attacks, and price increases are some of the several disruptive events that can hit supply chains out of the blue. Unfortunately, these are usually destructive to business performance.
Supply chain disruption is the new normal
Supply chains disruptions can be detrimental to companies. This is especially true today when businesses tend to have long and complex supply chains. However, the supply chains can cope with increasing numbers of unplanned disruptions. This is why there’s a need to institute brisk networked ecosystems to ensure supply chain resilience.
What is an ecosystem?
The word ecosystem can have numerous definitions. In a nutshell, an ecosystem is a thought that acknowledges that aspects or members of a system must work collaboratively to keep the system stable. The natural world presents evidence showing how a balanced ecosystem benefits all participants. However, it also indicates that an imbalance in an ecosystem can be destructive. Therefore, an ecosystem’s collective benefit is essential to addressing supply chain disruptions.
Networked ecosystems can weather supply chain disruption
Networks are essential in creating efficiencies for all. They also ensure that the supply chain is agile, productive, and has a greater sense of shared responsibility. Additionally, networks help the supply chain react at the speed of markets.
Globally, companies have scaled back on their operations due to staff shortages that preceded the COVID-19 pandemic. The outcome is a severe risk to global supply chains. For example, over 90% of Fortune 1000 companies have disrupted their supply chains due to the pandemic. As a result, the Oxford Economics research firm recently warned that global economic growth would likely shrink by more than $1 trillion.
So, how can businesses deal with supply chain disruptions to remain resilient? First, they should deviate from having inflexible, linear supply chains. Instead, companies should move towards operating within brisk, networked ecosystems by paying attention to five crucial areas:
1. Assessment and strategy
Businesses should do an uninterrupted supply chain risk assessment to test the stress levels in their supply chain. It is also essential to determine the most critical risk scenarios and then devise measures to address these risks. In your assessment and strategy, you might need to undertake the following:
- Analyze financial and operational data.
- Evaluate significant improvements during the institution of your supply chain strategy.
- Assess whether the implementation brought a return on investments.
- Assess the nature and weight of the risk.
- Address the risks with realistic and efficient interventions.
2. Capability build-out
Supply chain capabilities offer companies an absolute competitive advantage. They are also essential to the success and survival of companies operating in a dynamic market environment. The dynamic nature of today’s market allows consumers to apply specific product changes. These changes include real-time access and communication.
As a company, you should invest in supply chain capabilities. Some of the capabilities you need to invest in include visibility, assessment, and substitute business operating models. Others are supplier substitute sourcing strategies, network flexibility, and rigorous planning.
Other capabilities are online internet contact and interactions between your business and clients. This ensures you stay relevant and win in a highly dynamic and competitive marketplace! Only companies with advanced information technology resources and applications can call shots in the supply chain industry.
3. Take advantage of technology
New technologies will streamline by helping companies minimize their operational costs. These technologies also allow companies more flexibility in their supply chain process. Furthermore, technology enhances automating processes and speeds up the growth of businesses through data-driven decisions. Therefore, it’s essential to streamline and optimize your processes through:
- Real-time visibility – Ensures the immediate availability of insights to overcome potential hindrances by getting notifications and forecasting information. In this case, tracking options will assist you in discovering improvement areas to develop a more streamlined system. This will help with last-minute logistics. The advantage is that it leads to increased service levels and minimized costs.
- Automating routine tasks – This helps save time because your expert staff can focus on other vital areas.
4. Intelligence monitoring
It would help if you instituted risk monitoring and reporting tools. You should also develop an early warning system that allows prompt responses to risks or disruptions. Ensure to conduct risk assessments on products and look to establish whether there are any changes in demand and supply.
5. Operating procedures
As an organization, it’s crucial to have a backup plan for disruptive events. Therefore, the program should also cover operating processes and interventions toward predefined supply triggers. Delegating tasks is another essential aspect as it makes everyone feel involved in decision-making. Thus, it would be best to work to ensure you delegate authority and decision-making. Also, strive to keep all the external and internal communication protocols in place.
Major crisis management
At times, predefined responses to risk might be inadequate. Therefore, ensure that you develop and institute a crisis management framework to handle significant events in such scenarios. You could also accompany these with governance procedures and standardization in work procedures.
How TraceGains can help
It’s impossible to predict the entire social and economic impact of any event with a global impact. Even so, businesses must stay vigilant of the risk of unexpected supply chain disruptions if they hope to continue operating successfully. Therefore, you should take a proactive approach in your planning as a business. Do all this, keeping in mind that while protecting profits is crucial, the resilience of supply chains is critical to ensuring the well-being of individuals globally.
Supply chain disruptions can be detrimental to your business. At TraceGains, we’ve helped connect people and information by automating their supply chains. In addition, we’ll offer networked innovation, quality, and compliance solutions to your brand to help you minimize supply chain risk.
Protect yourself from supply chain disruption. Reach out today to request a demo.