The longer you spend working within supply chains, the more certain you become of one thing. Supply Chain stability and predictability are only ever found in one place – the dictionary.
You know that managing a supply chain is like navigating an endless storm. A storm that’s always knocking you off balance and off course.
But here’s the secret. Within this endless storm lies a way to build the supply chain resilience you need—a personalised guide that you can craft to your advantage. Pinpoint your unseen bottlenecks and inefficiencies. Uncover insights and untapped opportunities.
Here’s a method of forging a more resilient supply chain.
If you can anticipate, adapt to, and recover from disruptions while maintaining your operation and delivering to customers, you have a resilient supply chain.
Maintaining a resilient supply chain requires a mix of strategies supported by systems, processes, and people. When integrated well, they can mitigate risk, ensure flexibility, and deliver a robust supply chain network.
Capgemini found that companies are poorly equipped to cope with supply chain disruption. In their survey, 94% of respondents said supply chain disruption would impact their ability to maintain secure access to suppliers and customers. Only 11% were confident they could address the issues.
The disruption faced by Supply Chains is like someone throwing a spanner into the machines on the production line. It’s an unplanned, expensive, inconsistent occurrence that diverts time, effort, and money from the job they’re paid to do. No expense would be spared to find and address the source of the issue, to prevent its reoccurrence, and to ensure no further interruption to production.
Examples of disruption abound and fit into four categories – the Four Horsemen of the Supply Chain Apocalypse. They ride into town when you’re busy addressing one of their earlier deliveries when they return with another. It’s wave after wave of disruption.
Who are they, and what chaos do they deliver?
The constant challenges on prices, and the need to optimise and innovate. All part of the endless quest to achieve and maintain strength in the marketplace.
Eg: You’re Nokia in the early 2000’s. You own the new mobile phone market. You’re the new master of the telecommunications universe. Then one day at lunch, someone hands you an Apple…
Everything that impacts supply chains globally disrupts the flow of goods. These force the reconfigurations of flows. Uncertainty follows.
E.g. attacks on commercial shipping in the Suez Canal forcing re-directs and longer transits.
Economic disruptions impacting key inputs. This includes the availability and cost of raw materials, components, and skilled labour.
Eg, The shortage of timber to manufacture pallets in Australia due to a perfect storm of devastating 2019 bushfires, reduced shipping during the pandemic, and the increased demand from the building industry following the government’s Covid stimulus that increased timber demand for construction.
An existential crisis where an organisation struggles or ceases to function. Drivers are natural disasters, pandemics, or cyber-attacks.
Eg, One word. Two syllables. Starts with ‘C’ and ends in ‘-19’. Enough said.
History is a collection of disruptions – the four horsemen at work.
We never know which horse is coming next, but we always know one is coming. Appearing anywhere, anytime, they’ve been riding around delivering disruption for millennia with an OTIF delivery performance that has been outstanding. Each time they ride into town, their delivery of disruption is faultless. Bewildered, we’re always picking ourselves up and dusting ourselves off, lamenting the fragility of our supply chains.
It begs the question:
Why do we always get knocked down whenever they come galloping back into town?
Modern supply chains are becoming more complex. They’re more interconnected. They’re going digital. There’s a race to automate. Inventory is being pushed down. The last mile is being shortened. With every new advancement, there are congratulatory pats on the backs all around.
Advancing productivity is great. However, the increasing complexity means each disruption becomes more acute. Each time one of the horsemen comes thundering into town, your supply chain suffers.
Installing a reliable radar system would work best. But the tech is still tricky, and it might take some time to develop one that works.
The next best place to start is by mapping your supply chain.
To be clear, this isn’t an exercise in boiling the ocean. You can’t cover every conceivable disruption.
If you need to examine potential disruptions beyond your control, then try scenario planning.
Supply chain mapping will show:
It’s like drawing a map of your town and figuring out the weak points. If you can pinpoint the problem areas, then you’re better prepared when the horsemen come thundering back into town. The damage will be less.
When you document the inputs that make up your supply chain, you’ve got a wealth of data at your fingertips. Your clearest insights will come from the maps you can draw of your supply chain network. Or you can download it all into a spreadsheet and run a series of simple pivot tables. Either way, the key is in the inputs. Put your effort into compiling the inputs and the outputs will present themselves.
INPUTS OUTPUTS
Primary Supplier Details
Network Structure
Secondary Supplier Details
(your supplier’s supplier)
Linkages
Base / Commodity Raw Materials
Geography
Customer Details
Bottlenecks
Bill of Materials
Leadtimes
Logistics
Inventory Levels
Inventory per Material
Risk Points
KPI’s
Sustainability Factors
You might think the effort in mapping is too great.
Or, you might think you have a handle on your supply chain’s complexity.
But until you take the time to map your supply chain network, you won’t know the true extent of that complexity. You won’t appreciate the value until it is complete.
Once you map your supply chain network, you’ll see new opportunities for improvement.
Kept up to date, it will guide you in your continuous supply chain improvement.
Mapping your primary suppliers and distributors is your starting point, but you can push your mapping further. What about your secondary suppliers and distributors?
The further you can map, the better you can prepare. The more you’re prepared, the less damage you’ll suffer, the quicker you’ll recover, and the more resilient your supply chain.
The further you can extend your mapping, the further you can see into your partner’s supply chain. It gives you insights into the drivers of your upstream and downstream supply chain. Understanding their risks unveils your own. Identifying your partner’s vulnerabilities empowers you to adapt your relationship management. The new insight that mapping has given you means you’re better prepared. You can take preemptive action to safeguard your supply chain from potential disruptions.
The further you can map, the better you can prepare. The more you’re prepared, the less damage you’ll suffer, the quicker you’ll recover, and the more resilient your supply chain.
Because your supply chain is always evolving, new opportunities for disruption arise. Supply chain resilience through mapping isn’t a set-it-and-forget-it exercise. Any supply chain map has a dynamic shelf life. As your supply chain becomes more complex, the need to not only map it but maintain it, becomes greater. Visibility through mapping is the key to establishing a resilient supply chain. Maintaining your supply chain map is the key to strengthening that resilience.
When you maintain an up-to-date map, you identify the new opportunities that have arisen to disrupt your resilient supply chain.
As Einstein said, “You can’t use an old map to explore a new world”.
Remember the return of the four horsemen of the apocalypse is as certain as death and taxes.
History is a study of their endless disruption. Greater supply chain resilience will see you stand or fall the next time they sweep through. The power to stand firm depends on you.
PS: Did you notice something odd about the horse on the right?
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