Supply chain disruption can occur at many levels – from localized warehouse events – for example, fire or flooding – up to regional/global network failure caused perhaps by a major natural disaster or as, we know only too well, a pandemic.
Although managers cannot predict the type of disruption which may occur, its severity or when it will take place, they can make operations and supply chains more resilient by developing a programme of risk management practices. Supply chain managers should be asking:
There are five straightforward steps which can be followed to increase resilience.
Enhancing supply chain visibility is a fundamental part of the process. At a corporate level, this will involve auditing several tiers of suppliers to identify potential bottlenecks. Operationally, it may mean ensuring real-time visibility of shipments and the ability to re-route consignments to avoid potential disruption.
Obviously, the scale and complexity of this task will differ from company to company. However, every organisation is vulnerable to similar external risk categories. These include Economic (e.g. demand shocks, supply shocks, oil volatility, trade disruption and industrial action); Environmental (e.g. natural disasters, climate change, pandemics); Societal (ethics and corporate and social responsibility); Security (e.g. cargo crime, terrorism, corruption and piracy) as well as Technological (not least cyber-crime).
Although you never know when disruption is going to occur, or indeed its origin, by putting in place a ‘risk-agnostic’ programme, you can improve your company’s ability to maintain operations throughout a supply chain crisis. It may even mean that you gain an advantage over competitors who are not so well prepared.
Source: Transport Intelligence, November 12, 2020.
Author: John Manners-Bell