Global trade has rarely been a subject of much conversation, but the last two years have propelled the matter to the top of businesses’ agendas. The COVID-19 pandemic, repercussions stemming from the post-pandemic economy, and the ongoing conflict in Ukraine has exposed the vulnerabilities of today’s global supply chains.
These cumulative changes have shattered fuel markets and supply chains worldwide, provoking volatility and uncertainty. According to a recent Accenture analysis, supply chain issues brought on by the COVID-19 pandemic and Russia’s invasion of Ukraine might cause a cumulative loss to the Eurozone’s gross domestic product (GDP) of up to €920 billion by 2023.
Vulnerabilities are nothing new to supply chain leaders, but current conditions require executives and leaders to think from a long-term perspective, prioritizing resilience and risk management. Whenever and wherever they happen, leaders are challenged to mitigate the impact of disruptions quickly and cost-effectively.
Companies must be prepared to react quickly to mitigate near-term disruptions while simultaneously preparing contingency plans. Technology and visibility tools help, but a flexible and agile network design is critical to making a strategy operational. Organizations can control uncertainties through network modeling, simulation, stress tests, strategic buffer sizing, and multi-sourcing alternatives.
Key ways to build supply chain resilience
Fundamental factors that impact a company’s long-term resilience in the supply chain include proactive risk management, trusted and diversified relationships with suppliers, and the adoption of end-to-end visibility solutions.
The proactive supply chain becomes significantly more nimble and risk-resistant by putting these essential practices across all facilities and processes.
Enhanced risk management
The critical component on the road map to a proactive supply chain is identifying all possible risks. Executives frequently underestimate the number of ‘unpredictable’ dangers that are present. Analyzing all previous supply chain disruptions might help identify weak points and recurring patterns.
These disruptions might include failures in last-mile delivery, inbound shipments, or inventory. Every experience, even an adverse one, allows businesses to learn from common simple mistakes which can be used to develop resilience. In summary: proactive supply chains find it easier to predict risks and potential outcomes.
Diversifying supplier relationships
Building supplier relationships is always important, and is particularly valuable during difficult times. Healthy relationships are based on trust, clear communication, transparency, and durability.
However, companies should adopt vendor compliance programs to ensure partnership effectiveness and security. Additionally, it is worth assessing the company’s level of dependence on a particular provider or supplier region. More companies resort to diversifying their supplier network to prevent possible risks amid trade tensions across the globe.
To effectively manage risk and increase supply chain resilience, businesses should diversify suppliers and establish a transparent, interconnected network of partners.
Empowering end-to-end visibility
True resilience is primarily made possible by having a supply chain that is transparent and well-integrated. Visibility and concurrent control over processes enables early problem detection and allows risk prevention.
Supply chain integration & digitization are key factors in achieving supply chain visibility. Visibility is critical in helping teams manage exceptions and mitigate disruptions. Moreover, a data-driven supply chain can enable the early identification and mitigation of risks.
Additionally, data centralization offers insightful information and a complete supply chain picture. Ultimately, greater data promotes supply chain flexibility, precise forecasting, and improved risk management.
Resilient supply chain with Agistix
Robust infrastructure, integration, and automation are critical elements to digitize any supply chain and achieve end-to-end visibility. Visibility helps companies proactively manage. Therefore, in the foreseeable future, company priorities will place investing in advanced digital solutions for data centralization and automation at the top of the list.
Technology, which includes supply chain visibility platforms, is crucial for proactive supply chain transformation without disruption. These platforms can assist businesses with process streamlining, real-time tracking of shipments and transactions, historical data viewing, and supply chain gap analysis. Additionally, data centralization software helps companies strengthen connections with suppliers, increasing the percentage of deliveries that arrive on time, decreasing operational and labor costs, automating procedures, and fostering better collaboration and communication throughout the supply chain.
Agistix’s robust visibility software can help tackle visibility challenges without disrupting your company’s business flow, as a seamless integration process requires no change to your regular operations. Check out Agistix solutions today.