Building Resilient Supply Chains

Globalization has transformed the supply chain over the past few decades, connecting manufacturers, suppliers, and buyers all over the world together in a single marketplace. As shipping and transportation infrastructure improve, more and more companies have become reliant on international sourcing. Now, after a global pandemic and unprecedented inflation, the global supply chain is breaking down, forcing companies in every industry to take a new approach to their own supply chains.

In this “volatility, uncertainty, complexity, and ambiguity (VUCA) supply chain,” the No. 1 goal of every company should be to improve resilience. But what does resilience look like, and how do you achieve it? In this blog, we’ll cover the challenges manufacturers are facing, as well as the best practices and technology to mitigate risk.

How to identify supply chain risks

Every company has a number of weaknesses or gaps in their processes, systems, and networks that leave their supply chain vulnerable to disruption. Disruption can occur from any event or circumstance, including natural disasters and geopolitical conflict, as well as cybersecurity attacks, staffing shortages, supply unavailability, and broken shipping routes. Every single vulnerability can create delays, material loss, and other risks, resulting in unfilled orders or poor customer experience — all of which cost money to correct.

Manufacturers need to identify and remove vulnerabilities from their supply chains wherever possible. Here’s how:

Analyze all supply chain processes involved in procurement, production, transportation, warehousing, and distribution — including dependencies and interconnections between these processes. Pay attention to the processes that have the biggest potential for disruption, plus the impact it will have on the overall supply chain.
Look at historical data and performance metrics for all supply chain processes to spot bottlenecks, or recurring patterns that indicate vulnerabilities.
Interview key stakeholders (both internally and externally, such as vendors, logistics providers, and technology partners) to gain more insight into vulnerabilities from their perspectives.
Gather all data to conduct a risk assessment and scenario planning exercise to identify vulnerabilities related to regulatory changes, geopolitical conflicts, or emerging market trends.

Conducting all of these steps will help manufacturers achieve a clear picture of their total vulnerability in the marketplace, as well as help them prioritize which processes to safeguard first.

Supply chain best practices for modern manufacturing

Improving supply chain resilience isn’t just a matter of taking corrective measures, it’s about proactively restructuring current processes so they aren’t so vulnerable to begin with. Here are some best practices for removing supply chain risks in the VUCA era:

Diversify supply base High volume sourcing from a limited number of suppliers is no longer safe. Manufacturers should have multiple options for sourcing the same materials and commodities in the event of a shortage or shipping issues.
Build strong supplier relationships Having a communicative and trusting dynamic with suppliers encourages greater flexibility in contract fulfillment and more favorable terms, both essential for maintaining production schedules amid heavy disruption.
Implement demand forecasting and optimize inventory To avoid disruption, manufacturers should know how many orders to expect for a product in the future, and stock materials and supplies for production accordingly. By planning ahead, manufacturers can avoid delays in order fulfillment, without over or understocking inventory and wasting money and warehouse space.
Improve employee training Update all employee training protocols to prevent waste during production and to respond more efficiently to disruptions at any point of a process.
Enhance communication and collaboration To work and respond to disruptions effectively, employees need a streamlined way to alert other stakeholders about challenges and roadblocks, and work together to find solutions.
Embrace technology New software solutions, like product lifecycle management (PLM), configure, price, quote (CPQ), and engineering simulation platforms feature capabilities that enable these supply chain best practices — especially communication. Adopting the latest solutions is one of the most effective ways to streamline processes and mitigate supply chain risks.

Revalize to the rescue

Effective supply chain management encompasses a number of departments and platforms. In order to optimize processes, it’s imperative for every stakeholder to be using the latest generation of technology, and for all of the different software platforms to communicate with one another.

Revalize is an enterprise software provider offering a number of innovative solutions for the entire idea-to-cash journey in a single ecosystem. If you need help managing supply chain risks, Revalize has a number of solutions available — all able to integrate seamlessly with your existing technology. Get in touch with our team to learn more.