5 Fundamentals for Building a Resilient Supply Chain
As the world is racked by a major crisis such as the Corona virus today, the resilience of businesses is tested the most as continuous threats plague their supply chains. Since there isn't much historical data on how to contain the economic risks of such a crisis, companies today need to develop coping strategies to maintain their supply chains effectively.
This is where businesses need to build resilient supply chain systems or hire a trusted supply chain managed services provider, which not only deals with risks efficiently but also advances profits during any crisis. Here are 5 ways you can build a strong supply chain system that helps you to sustain and expand your business, even during a crisis.
1. Have a Strong Crisis Management Team
If the pandemic has taught us anything, it's that having a solid crisis management team pays off! As most of the workforce including suppliers and logistics personnel are working from home, the crisis management team is what holds everything together by working cross-functionally between different teams. From running business continuity drills so that work isn’t hampered to acquiring the right technology for seamless business functioning and anticipating disruptions - this team will be the superhero that helps grow your business during any crisis!
2. Digitize Most Operational Processes
With the adoption of the internet of things (IoT), artificial intelligence (AI), automation, and machine learning - digitization has become a part and parcel of successful supply chains today! Digitization not only streamlines entire processes but also improves visibility within the supply chain, thus giving a business full control in its hands. It also opens up vast amounts of data to you, right from product origins to customer shopping patterns. This data can then be viewed in real-time, which helps leaders make informed production decisions in the organization.
3. Develop a Robust Risk Management System
This risk management system requires that you properly anticipate, identify, and document risks. Establish an efficient risk management method for every supply chain node covering warehousing, transportation, sourcing, logistics, etc. Once there are systems in place that routinely assess risks in each department of the supply chain, they can be effectively dealt with, with strong action plans that prevent damage to your business. Such a robust system that deals with risks well, will lead to successful supply chain management.
4. Align Procurement Strategies with Supplier Relationships
It's always advisable to maintain a deep relationship with your key suppliers and trading partners, especially if you are a small-sized business! Suppliers are crucial for any enterprise and even a deteriorating relationship with one of them could cost a catastrophic effect on your business. This is why you must maintain meaningful relations with your suppliers so that you can be forewarned early about rising problems as well as rely on them for help in times of need.
On the other hand, if your business does not have strongly allied relations with trading partners, you can also adopt another approach of diversification. This involves maintaining an extensive network of suppliers that helps to distribute and thus reduce the risk, should a failure occur.
5. Establish a Collaborative Corporate Culture
An inclusive, collaborative, and transparent corporate culture is what makes companies resilient during major crises today. Such a culture allows for a continuous communication process in the company so that every employee is informed of even the smallest disruptions. Power is distributed so that employees can then take necessary actions during these disruptions and in times of need.
Besides this, instilling a passion for working towards a greater goal is equally important. It's as simple as what the CEO of Southwest Airlines, Herb Kelleher says, recounting the words of one of his managers - “The important thing is to take the bricklayer and make him understand that he’s building a home, not just laying bricks.”*
* As recounted in the Harvard Business Review
At IDC Technologies, we are adept at managing the supply chain effectively. We ensure that the processes are streamlined, the effects of any crisis is mitigated effectively and on a timely basis and your business scales to new heights.
