Increase resilience
So how can businesses improve their supply chain resilience?
Joe’s belief is that rather than simplifying supply chains, businesses should embrace their complexity.
Naturally, he believes that investing in new technologies is of paramount importance. Early detection systems, for example, can automate supply chain risk management and provide real-time visibility into the supply chain, helping businesses quickly develop proactive responses to anticipate disruptions .
Emerging technologies such as AI generation are also expected to be adopted with the aim of transforming decision-making and operational efficiency through predictive analytics and automation.
Elsewhere, collaboration is increasingly seen as key to resilience, as Joe explains: “Businesses looking to strengthen their supply chain operations should consider prioritizing partnerships over competition .
“By collaborating with other companies, we will improve real-time visibility, joint problem solving and relationship building throughout the supply chain. »
David also refers to suppliers, highlighting that understanding and tracking Tier N suppliers can help predict potential points of failure among Tier 1 suppliers, enabling inventory buffers, increasing sources of supply alternatives and even the advance purchase of raw materials on behalf of these Tier 1 suppliers.
He adds: “Businesses can improve their resilience by seeking alternative sources of supply, including leveraging nearshoring and friendshoring strategies.
“These same concepts can be applied to logistics capacity and network resilience as well as workforce availability and cross-training throughout the supply chain. »
Then there is the consideration that organizations such as retailers must give to changing customer expectations.
“Today’s customers are more demanding than ever,” says Joe. “One of the expectations that is accelerating supply chain complexity is post-purchase order changes, which could have significant impacts on warehouse operations and the supply chain.
“When businesses understand and plan for these new expectations, it will strengthen their overall resilience. »
Lean or agile
In modern supply chain management, an important debate is between “lean” and “agile”, two very different approaches to the supply chain.
The Lean approach focuses on minimizing waste and maximizing efficiency. Those who adopt it seek to streamline their operations, reduce costs and eliminate all non-value-adding activities.
Meanwhile, as the name suggests, the agile approach to supply chain emphasizes flexibility and responsiveness and is designed to enable businesses to quickly adapt to changing market demands and external disruptions .
In a world dominated by unforeseen disruption, one might imagine that an agile approach is the way to go, but David has a different view.
“Supply chains can be lean while still being resilient, but this requires strong visibility, coordination and orchestration of contributing suppliers,” he says. “In some cases, greater agility comes down to having accurate information more quickly and, as such, supply chain transparency is a critical contributor.
In other cases, adaptive capacity relies largely on the availability of alternative sources of supply to enable production to continue. Stockpiling is rarely an effective strategy for improving resilience beyond the very short term.
“In general, we find that customers are willing to pay for innovations that improve the reliability and visibility of their business. »
On the other hand, Joe maintains that agility is essential for companies looking to build resilience into their supply chain.
He concludes: “For a truly resilient supply chain, businesses must find the right balance between being strong enough to withstand unforeseen disruptions and flexible enough to adapt quickly to changes.
“Achieving agility requires continuous improvements to supply chain processes, including constant evaluation and optimization that will ensure supply chains can quickly adapt to unexpected changes.
“For example, labor markets remain very difficult, so it is not always possible to hire staff to accommodate growth or seasonal peaks. Solutions such as AMRs – to increase capacity – and gamification – encouraging workforce retention, recruitment and productivity – will remain essential.
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