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The major upheavals of the last couple of decades, such as the global recession and the COVID-19 pandemic, have demonstrated that firms will suffer severe setbacks if their supply chains are not resilient. An entire supply chain becomes vulnerable if one component is exposed to risk, just like a house of cards will topple if one section is out of balance.
Supply chain resilience refers to an organization’s ability to use its resources to handle unanticipated supply network disruptions. In other words, it is the ability to respond to and recover from challenges without disrupting operations or deadlines.
These statistics from last year demonstrate why supply chain resilience is crucial:
Despite this, over 70% of organizations don’t have a business operations contingency plan to deal with disruptions lasting more than a few weeks.2
A resilient supply chain incorporates the following four essential elements, regardless of industry or geographic location:
A resilient supply chain requires continual monitoring. However, today’s organizations frequently lack awareness of what’s going on with their vendors and consumers at different levels. Vendors that are critical to a company’s success should always be closely monitored.
It’s critical to identify issues before they become severe impediments, such as ransomware penetrating your network or a computer part being delayed in shipment. Knowing about issues as soon as they arise allows you to seek out other options and update customers quickly.
Even though eliminating single points of failure is a critical part of risk mitigation, many companies still rely on a single vendor, region or country in their supply chain portfolios. It’s ideal to employ a mix of near-shore and offshore vendors for each component so that if one region/vendor goes down, suppliers from other locations can step in.
Security, backup and compliance postures must be strengthened to ensure operations continue even if one of the vendors/regions gets affected. The goal must be to build incident tolerance or the ability to ensure that the supply chain keeps running, regardless of the nature or scope of an incident.
The most successful organizations operate with an agile mindset. They work hard to keep up with market trends as well as the latest technology developments. They use the best tools and strategies in the industry to gain insights, foresee opportunities and risks, and take aggressive action ahead of their competitors.
People, processes and technology are the three key enablers of a robust supply chain resilience strategy.
When it comes to the supply chain, a crisis management team comprised of the most skilled and resilient people must be established.
By relying on organizational insights, the team must draft a response playbook and acquire appropriate technologies. Additionally, to prepare the entire organization for disruptions, the team must develop and run mock drills.
Employees perform at their best when efficient and reliable processes support them. As a result, digitizing as many processes as possible is highly recommended. This allows organizations to access large amounts of data and information in real-time, which they can utilize to make decisions regarding crucial competencies required to navigate a crisis.
Technology can fine-tune the processes within an organization accurately. Using proper technologies to construct a centralized incident management system is the best method to detect issues and maintain accountability within the supply chain.
Although making your supply chain resilient is a vital undertaking, it takes time, effort, and expertise. Working with a specialist like us to manage resilience matters while you focus on running your organization is ideal. Contact us to schedule a no-obligation consultation.
Additionally, to learn more about organizational resilience, download “The Ultimate Guide to Organizational Resilience” by clicking the download button below.
Sources:
Also, read:
The Top Supply Chain Vulnerability: People
Are Your Business Partners and Vendors Potential Security Weak
Recommended Best Practices for a Secure Supply Chain
How to Become a Resilient Organization
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