Supply Chain Resiliency is a hot buzzword that we are hearing more frequently in the post-COVID pandemic logistics industry landscape.
As businesses continue to emerge from being on standby throughout the pandemic and the workforce continues to try stabilizing itself, resiliency has been the term most frequently used to describe both the workers and the business. The ability for a business or an industry as a whole to sustain such large impacts, weather the storm and come out of it, ready to pick up where it left off is critical. This is what this buzzword is all about.
While this word has become a bit of endearing encouragement, it is indeed achievable, but it will take a little bit of work...
Identifying and Addressing Weakness
Resiliency within a supply chain heavily relies on the business's ability to identify its weaknesses. Common supply chain weaknesses include data management, employee engagement, inventory/warehouse tasks, and carrier issues.
JIT-based businesses are extremely vulnerable, as many of these factors are determined by the current orders, and surges in orders could cause Stockouts if the company has not built up a resiliency.
Businesses which rely solely upon freight carriers are also vulnerable because the carrier’s management is concerned about getting the product from the starting point to the delivery point, the inventory is left as a secondary concern if it is at all considered.
To find the weaknesses within your supply chain, you will need to study ordering, inventory, and delivery patterns. Whether you have manual spreadsheet data input or automatic data analytical software will determine how you will need to compare the data. Things to look for will be delayed shipments, spikes in orders, and times when employee engagement was low.
Strengthening the Chain
Supply Chains can become more resilient by strengthening the weak areas. In most cases, this will involve a bit of restructuring and considerations to potential threats to the supply chain. Data management should be constantly verified. Manual to software-generated data should be checked for consistency daily, weekly, or quarterly. Training in inventory and warehouse management or using an IMS and WMS or WES is crucial.
Additionally, if you have a business that leverages JIT strategies and relies upon re-order generating software, ensure that the levels are set accordingly. Seems like a rather obvious item to monitor but it is actually too often overlooked, likely for the same reason.
Carrier issues can be a bit problematic in building resiliency. Freight Carriers are often managed by companies outside of the business and so implementing strategies to the infrastructure of the business may not be obtainable. This is not to say that you cannot encourage timely deliveries by contractually implementing penalties for delays. Another solution is to use a 3PL instead of a supply freight to manage all aspects of the shipping.
Employment engagement can be a weakness in the supply chain. Build resiliency through strong communication with your HR. Training of employees as well as providing incentives for jobs well done will minimize common weaknesses in employee engagement and boost the overall strength of your operations.
Know the outside factors
While building resiliency within your business strengthens the overall supply chain, it is important to consider outside factors. Plans should be made to adjust and compensate, ensuring that your business does not suffer.
For example, if your business uses one carrier to deliver the product and that carrier has an issue causing them to shut down for an entire month... do you have a backup supply freight who can handle the shipping demands of your company?
Do you have part-time trained employees who can fill in to keep production and distribution functioning properly?
These are things which should be considered.
Any company which relies heavily upon its software should build up a strong resilience against outside forces. Just having a firewall and anti-virus software is not enough. Ransomware is continuously evolving, and more and more companies are having critical information held, bringing their supply chain to a screeching halt. Back up all data to an external source on a daily or weekly basis. Further, minimize the risk of data breaches by keeping personal emails off any computers which handle large amounts of operational data.
Can Building Supply Chain Resiliency Help Future-proof it?
There is no way to completely safeguard a supply chain. However, businesses can build up a resiliency that decreases the probability of lags, stockouts, and ordering and delivery-related issues. Understanding your business's strengths and weaknesses, building up strong relationships with all departments within your supply chain, proper training, and knowledge of outside variables which could hinder the effectiveness of your supply chain builds resilience.
Businesses with the strongest supply chains are those that employ multiple levels of resiliency. Remember that a supply chain is made of many links and should any of those links become weakened, the entire chain is at risk. Get to know all the various processes that keep your supply chain running, take a deep dive and explore the inner workings at play. See out the weaknesses, don't wait for them to reveal themselves.
If you don’t know where to begin or what potential issues your supply chain faces on a daily basis, ask your employees. Your staff sees daily real-world examples of what works as well as which processes have issues, so they can inform you of what they believe the company can improve upon in one way or another.