The disruptions brought about by the coronavirus pandemic and geopolitical instability combined with a dramatic increase in customer demand has strained supply chains around the globe. Many companies wish things could simply go back to “normal” as they were before all these troubles began.
Unfortunately, “normal” has changed so much in the last few years that businesses must learn to evolve in order to survive. Indeed, a report by the Council of Supply Chain Management Professionals (CSCMP) outlined how supply chains will continue to experience troubles and transformation through 2030.
It is not surprising, then, that talk of supply webs are becoming common, and “flexibility” and “resilience” are the new buzzwords. But what is a supply web? How can a business build flexibility and resilience into their supply network? We’ll explain what it means to build a resilience supply chain and describe some basic steps companies can take to ensure they survive and thrive in the coming years.
THE SUPPLY WEB
A supply chain is the network between a company and its vendors to produce a specific product to a buyer. This chain connects not only the company with its immediate vendors but with the suppliers of those vendors and so on all the way back to the raw materials. Each “link” in the chain works with those connected to it in order to add value to the final product. However, the old adage holds true,” a chain is only as good as its weakest link.” If there is a problem in your supply chain several “links’ down from your business, it can have a detrimental impact on your operations. These problems are increased if you only have a single source for a product.
The idea of the supply web is to have several vendors for critical products in your supply network. If there is a break in one of the “links” in your chain, products and materials can be rerouted through alternate vendors or transportation modes so that your operations are not disrupted. Companies in the next few years and beyond will need to be able to track market patterns and adapt their operations to meet changing conditions.
HOW TO BUILD A RESILIENT SUPPLY CHAIN
There are several steps companies should take to build flexibility and resilience into their supply chain.
DIGITIZE
In order for a company to take full advantage of the future, it must first digitize its data. This important step has multiple benefits. First, digitization allows a company to automate their operations. Automation includes a range of technologies such as using ERP or WMS systems to conveyors, pallet loaders, and AMRs. Digitization is mostly important for the number one goal of the company – satisfying the customer.
Customers today want fast, transparent service. With eCommerce growing exponentially, many consumers today expect inventory to be available and ready for fast delivery or they will go elsewhere. In order to meet that demand, businesses need digital systems to take internet orders, track products and inventory, and give customers a real-time update on their orders.
SHARE
Another benefit of digitization is the ability to share information within your own company as well as with your suppliers. A siloed system is one in which data is contained only within that system and not shared. Many businesses have vast amounts of data in different locations and in different formats; by bringing them together you can eliminate silos within your organization which will allow you to make more informed decisions regarding end-to-end inventory and workflow operations.
Sharing data with vendors can strengthen partnerships and provide stronger supply chains. Your vendors can have the assurance of steady, continual orders which will enable them to build their own supply lines in order to support yours. In turn, if your vendor has an issue along their supply line, they can rapidly inform you so together you can find possible solutions. Open, rapid communication is critical to creating a responsive supply chain.
DIVERSIFY
A supply chain is considered weak if there is a single vendor available for an item, and that vendor is half a world away. Finding alternate suppliers can create resilience in the event of an unforeseen event. Finding vendors outside of geopolitically unstable regions can reduce much of the uncertainty in your supply line. Consider nearshoring rather than offshoring to reduce lead time and transportation bottlenecks.
COMMIT
Once you’ve built your resilient supply web, you will have to maintain it. A flexible supply chain today may not work as well in the future; your company needs to actively monitor your supply chain and be ready to adapt and make changes when necessary. Having a good supply chain or material manager can ensure your supply web remains flexible and resilient from raw materials to satisfied customer. An alternative to hiring a full-time expert is to consult with a professional supply chain management services provider, such as ASCI. They can advise you thorough the complexities of supply chain management and provide a range of support services to keep your business growing.
SUMMARY
Building a flexible and resilient supply chain is all about connections. Connecting your data for complete transparency, connecting your customers to real-time information, connecting with multiple suppliers for increased security. These connections require commitment to initiate and maintain, but the result is a strong supply web that can react and adapt to almost any situation while adding value to your organization and increasing customer service.
ABOUT THE AUTHOR
Jason Kelly recently completed an internship with ASCI. He graduated from the University of Alaska Anchorage with a bachelor’s degree in Global Logistics Supply Chain Management and a minor in Computer Information Systems. He also received an Occupational Endorsement Certificate in Business Analytics. His experience in logistics lies in oilfield supply, inventory consignments, and air cargo shipping, and thanks to this internship opportunity, governmental contracts and blog writing.
Contact us at hello@ascillc.com or (907)348-1610 if you would like to set up a free consultation appointment to help with your business’ inventory management needs.
