3 Definitive Characteristics of an Agile and Resilient Supply Chain
- A flexible supply chain is a more resilient supply chain
- Intelligent software supports visibility
- Digital transformation is a key to managing risk smarter
When governments shut down their economies this past spring to contain COVID-19, the resulting stress on supply chains lead ultimately to shortages for consumers and high levels of volatility and uncertainty for companies. With the pandemic still wreaking havoc on the global economy, how to build supply chain resilience is a hot topic for multinational companies.
What are the important factors for companies to consider when designing their supply chains to be resilient to future crises? To start with, supply chain management systems need to be flexible, visible, and intelligent.
Flexibility to Respond to Unforeseen Disruptions
Building a resilient supply chain means cultivating a supplier network that can withstand sudden shocks and disruptions, but it also means being able to pivot quickly in order to adjust to new realities. Companies won’t be able to just stockpile inventory in order to handle the crises of the future – it’s just not feasible in many industries, and storage costs can quickly add up.
A resilient supply chain is one that can adapt in times of crisis and find new ways to create value. For example, during the COVID-19 pandemic is how distilleries shifted to producing hand sanitizer, or how textile manufacturers retooled to meet the shortage of PPE.
Flexibility depends on the ability to manage change effectively. Supply chain planning systems can help companies recognize those opportunities amid the chaos, but complete visibility of that supplier network is a prerequisite.
360-Degree Visibility to Enable a Holistic Approach to Decision Making
Supply chain visibility means being able to map out the entire supply chain and bring data together from all levels to identify potential risks, current pain points, and opportunities. Having visibility enables a company to identify where its inventory and shipments are at any given moment, so that, in the event of a situation, it can adjust in real time.
To ensure that the supply chain stays up to date and valuable for planning and forecasting, it needs to be fed with live data from all the various systems and nodes that comprise it - inventory, manufacturing, distribution, shipping, etc. To make sense of all that data, supply chain management software needs to be intelligent.
Intelligence to Sense Trends and Detect Opportunity
The need for visibility and rapid response in supply chains is driving the trend toward automation and digitization of supply chain activities and decision making. Next-gen supply chain visibility solutions are utilizing artificial intelligence and machine learning to capture data from the entire supply chain and derive actionable insights from it.
An intelligent supply chain planning system provides the advantage of being able to more accurately predict, sense, and react to the opportunities hidden in with the risks. When disruptions occur, it enables companies to make rapid, data-driven decisions.
Prioritize Digital Transformation to Build Resilience
Businesses can’t eliminate all risks to their supply chains – not without choking off the opportunities that arise from those risks. But they can mitigate risks significantly by digitally transforming their supply chain. And investing in a supply chain planning software that can enable them to gain visibility into the entire supply network, conduct what-if planning to prepare for contingencies and black-swan events, and adapt to sudden changes. By doing so, they’ll make their supply chains more agile, resilient, and able to tackle whatever challenges come their way.