01 Mar Four Strategies for Creating a More Agile, Resilient Supply Chain
Manufacturers need supply chain processes agile enough to make faster changes, and resilient enough to recover from a lack of people, products or capacity
A timely test of the health of global supply chains will be the manufacturing and distribution of the vaccine for mass inoculation against COVID-19. The coming months will prove the importance of agility and resilience to rapidly shift sourcing, manufacturing and distribution activities.
Convergence of Challenges
In addition to the pandemic, global supply chain leaders continue to face myriad challenges – including global protectionism, multiple constrained markets and a quickly evolving global trade environment, to name a few. While not new, most of us have not managed through these concurrently.
So many unknowns and so much uncertainty means that manufacturers need more efficient, yet resilient and agile supply chain processes.
Your end-to-end supply chain practices must be agile enough to make faster changes, and resilient enough to recover from a lack of raw materials, product or capacity. Agility will ensure the right cost, service and quality given external market factors. Resilience will mitigate the impact of disruption where there’s potential points of failure.
Here are the four practices we are using to achieve the agility and resilience needed to counteract the instability caused by supply chain uncertainty:
- Capacity. Capacity is precious. It’s your ability to generate and build product, and it starts with answering the question, “How do I generate enough to satisfy demand?” The COVID-19 vaccine is gated from a manufacturing perspective; companies can only distribute what’s available. The point for you and for your product is to stay ahead of capacity and never be constrained by it.
- Balance. A supply chain will not succeed if the focus is only agility or resilience. There must be balance because:
- Agility is offense. This is how you support customers when there is unplanned demand and unforeseen constraints.
- Resilience is defense. How do I protect supply and capacity? How do I move inventory to be certain I have what I need to build what I promised? The answer can be manufacturing redundancy.
- Redundant manufacturing. This plays a major role as most organizations think about localization or reshoring initiatives for faster response times. The pandemic is forcing defensive moves. If you can protect your product mix and still transform operations, do it. But if you can’t do both, right now focus on getting your product out the door through redundant manufacturing.
- Disappearing workforce. The pandemic has exposed the lack of robustness in some supply chain strategies. Even the best plans did not account for the rate of absenteeism due to illness, or the effect of stay-at-home orders. Cross-training and upskilling are part of the solution. An unpredictable workforce and constrained labor markets make resiliency and redundancy even more important.
Digitally Transformed Supply Chain
From an agility perspective, the convergence of Information Technology (IT) and Operations Technology (OT) fits into an overall digital manufacturing strategy. A digitally transformed organization is ultimately faster to the right decision, and can more easily achieve the right balance of agility and resilience in the supply chain.
With our strategy to bring the Connected Enterprise to life, we help organizations solve daily manufacturing challenges. As a manufacturer with our own integrated supply chain, we understand the evolving industry challenges confronting global manufacturers.
The pandemic has pushed manufacturers into a new realm of supply chain scenario planning. Being agile and resilient is more than how we deal with uncertainty; it’s our response to changing business processes. A solid digital transformation strategy and technology deployments will allow manufacturers to meet commitments and even create a competitive advantage through their supply chain.
Supply chain professionals will need to contend with these disruptions and the complexity of vast amounts of data and insights; and use the latest processes and technology solutions to balance agility with speed, efficiency and capacity.
These challenges have created the biggest opportunities for new ways of thinking, perspectives and innovation. Ultimately, this experience will create more robust supply chain practices.
Learn more about supply chain challenges and solutions, as well as other aspects of successfully implementing digitalization, on the Management Perspectives Hub.