When the world around us pivots and changes, resilience is key to meeting adversity with opportunity.
All the changes we experienced in the past year are a testament to that statement.
In the business world, global supply chains felt every one of those changes to a great degree.
At the beginning of the pandemic, supply chains were strained when people started panic buying and emptying store shelves of essential products.
When people started staying home more, supply chains had to re-evaluate how to approach their operations to ensure people were getting what they needed.
Measuring Supply Chain Resilience
Last year, the Association for Supply Chain Management and The Economist Intelligence Unit partnered to create a benchmark that businesses can use to measure the health and resilience of their supply chain.
The two areas of the benchmark include:
- Operational resilience – An organization’s ability to anticipate, withstand, and respond to supply chain shocks effectively. Operational resilience also measures the organization’s ability to return supply chain operations to normal.
- Strategic supply chain resilience – How organizations prepare for long-term risk and structural changes that occur by adapting to new environments, building stronger partnerships, and adopting sustainable practices.
By focusing on these two key areas, supply chain organizations can gauge how well they are prepared for the unpredictable external shifts that occur in the business landscape and the world.
How Can Supply Chains Focus on Building Business Resilience?
Supply chains need to have a game plan.
Building business resilience includes not only how your organization operates and its internal capabilities. It also includes the external relationships your organization has.
Here are some key learnings that supply chain organizations can focus on when it comes to building business resilience:
- Collaborate with suppliers – Having a strong network that can support your organization when changes occur, and even when things are “business as usual”, is important. Long-term success requires long-term relationships that can support your bottlenecks.
- Increase visibility throughout the supply chain – Accessing data from your suppliers ensures you can correctly anticipate disruptions and quickly respond to disruptions.
- Multisourcing – Having a multisourcing strategy means segmenting your suppliers. When disruptions occur, you can source to additional suppliers or locations as needed.
- Inventory and capacity buffers – Buffers are especially useful in the form of surge capacity. This helps respond to sudden increases that occur.
How We Help
Demand-Driven Material Requirements Planning (DDMRP) is a tool that is especially helpful for organizations looking to improve business resilience in their supply chains.
By relying on actual demand throughout the supply chain instead of only forecasts, you can optimize inventory and be more collaborative.
You can use DDMRP to support all your supply chain needs to improve visibility, velocity, and variability – whether it be warehousing, data extraction, production, or something else.
Our innovative solution allows organizations to be ready to anticipate and respond to disruptions with confidence. Want to learn more about how DDMRP can help you? Contact us today!