Build a Resilient Supply Chain: 8 Tips for Success

[dot_recommends] September 6, 2021 Manufacturing Trends

Beyond Digitization: SME Supply Chain Solutions

Build a resilient supply chain to reduce the lost earnings from supply chain disruption as shown in this visual. Losses varied by industry. According to a 2020 study, a 100-day persisting disruption to both production and distribution supply chains can cause a 90 percent decline in earnings before interest, taxes, depreciation, and amortization (EBITDA) of a commercial aerospace company. Source: Statista

Supply Chain Disruptions Continue

We didn’t need Resilinc to tell us that the supply chain disruptions from the COVID-19 pandemic event were “severe.” However, it is noteworthy that Resilinc has never ranked an event at that level before. A record number of factory fires and extreme weather events have generated further disruptions. Many industrial manufacturers remain focused on ways to build a resilient supply chain.

How Have Companies Responded?

Digitization of the supply chain accelerated during the pandemic as global manufacturers recognized the value of real-time data. The increased efficiency and transparency of digital supply chains benefit companies that can make that investment. However, the costs of digitization may not be feasible for many SME companies at this time.

Consolidations, mergers, and business sales also increased as companies sought cash to stabilize their business or optimize the supply chain and retain customers.

What More Can SME Business Owners Do?

Here are eight non-digital strategies to protect your business from future supply disruptions.

  • Build up inventory to a safe level when possible.
  • Evaluate your supplier networks for strengths and weaknesses.
  • Establish relationships with multiple sources for critical components and materials.
  • As you identify backup vendors, diversify by country to decrease risk of all suppliers being affected at the same time
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  • Take a big-picture view of your company’s vulnerabilities, including materials, processes, and operations.
  • Plan to balance priorities between customer service, cost management, and resilient operations.
  • Create a cross-functional emergency plan with input and insights from organizational leadership, partners, and other relevant stakeholders.
  • Reduce stress in your employees and leadership by communicating strategies and supporting wellness initiatives for a more resilient workforce.

 

I hope these tips will help you in your efforts to build a resilient supply chain. As a partner with industrial manufacturers, we’re available to consult with you directly. Contact us to set up a conversation.

–parin
Managing Partner, StratMg

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