Building a Resilient Supply Chain


Regardless of the circumstances, a company’s ability to survive disruptive processes and events is one of the key differentiators of a successful business strategy. The thing is, most companies start to realize its importance only when the storm already happens. In the majority of cases, risk management strategy sits far down the list of business priorities and often can be put on the backburner of business plans.

Today, there are more supply chain threats than ever before. And it’s not a matter of if a disruption occurs, it is a matter of when it occurs. Unpredictable events are called unpredictable for a reason, of course, but there is a systematic regularity of such ‘black swans,’ which is often neglected by the companies. Whether it is a natural disaster, the unexpected crash of the economy, or a virus outbreak, unpleasant processes are bound to happen at some point.

However, some companies appear to handle such disruptions far more successfully than

others. This is because they have a strong, advanced risk management strategy when others don’t. Making your supply chain more resilient can help you strengthen your business and make it through a critical time.

How to make your supply chain more resilient?

In the business environment, resiliency means a company’s ability to recover and get back to normal operations, including the time this recovery takes to happen. By adopting certain practices, you can reduce the time needed to bounce back from serious disruptions, and minimize the damage.

Extend the network of suppliers

Good and trusted relationships with your suppliers are a key factor in a successful risk management strategy, even if you have a small circle of highly trusted vendors. However, it is more of an exception than a rule. If you don’t have complete visibility into your partnership with suppliers, it’s better to have more options to choose from. Usually, if a key supplier fails, it leads to a serious supply chain disruption. Having more partners you can turn to greatly increases your supply chain resilience.

Cross-mobility and standardization

Another useful practice for risk management is adapting standard procedures and layouts for operations and product manufacturing. Implementing identical techniques at all your facilities and adjusting inventory to having semi-ready products makes your supply chain way more flexible. This way, you can easily move production to another facility, or transport materials and workers among warehouses and factories, because core processes are the same everywhere.

Circular supply chains and visibility

Moving from linear, sequential supply chain models has been a trend in recent years, and that’s for a reason. Having a transparent, well-integrated supply chain keeps you in line with all the current processes happening, and allows you to define the problematic areas at an early stage. Visibility and simultaneous monitoring also speeds up responses to disruptive processes, therefore eliminating the damage.

Communication and empowerment

Corporate culture plays a crucial role in creating a resilient supply chain. The more aware and informed your employees are at all stages about the processes happening in the company, the more it helps you during a disruption. Companies with rigid centralized structures and shallow communication have to spend tons of time informing employees when it’s already too late, fixing their mistakes, and hindering the critical responses to disruption. At the same time, businesses, where workers are clearly aligned with the event flow and are empowered to make decisions and take action are more prone to faster, and more efficient recovery after a shake.

Analyzing previous disruptions

Learning through your own mistakes is the best way to prevent the same outcome in the future. Analyzing all the previous disruptions that occurred in your company’s timeline can help figure out weak spots and useful practices. Large disruptions are not the only ones companies can learn from. Small discrepancies happen every day, and the more experience a company has, the more it is likely to demonstrate good resiliency.

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