Resilience is a buzzword we hear often in the context of the post-COVID pandemic logistics industry. It’s often used to describe both workers and businesses, as businesses continue to work on their labour security out of a wait-and-go state throughout the pandemic. It’s important for a company or industry to embrace these big impacts, get out of the storm, and start preparing where it left off. At the outset, these words may sound a tad endearing encouragement, but it’s certainly achievable.
Spot and bust weaknesses
The resilience of a supply chain is highly dependent on its business ability to characterize weaknesses. Common supply chain weaknesses include data management, employee participation, inventory/warehousing, and shipping company issues.
JIT-based (Just-in-time) businesses are extremely vulnerable, as many of these factors are determined by current orders, and if the company is not building resilience, order spikes can result in out-of-stocks. Companies that rely solely on freight carriers are also vulnerable. Inventory remains a secondary issue, as shipping company management is concerned about taking the product from departure to destination.
Filling in the gaps
Supply chain can be more resilient by strengthening vulnerable areas. In most cases, this involves some structural adjustments and considerations for potential supply chain threats. You need to continually check your data management. Software development, manual data should be checked for consistency daily, weekly, or quarterly. Inventory and warehouse management training or the use of IMS and WMS or WES is very important.
Also, if you have a business that utilizes a JIT strategy and relies on order generating software, make sure your levels are set accordingly. Watching obviously looks like an item, but perhaps for the same reason it’s overlooked.
Transporters are often not able to implement a business’s infrastructure strategy because they are managed by out-of-business entities. It does not mean that the consequences for delays cannot be contractually implemented to encourage timely delivery. Another solution is to use 3PL instead of supplied cargo to manage all aspects of shipping.
Familiarize with external factors
Building resilience in your business allows the entire supply chain to be strengthened, but it’s important to consider external factors. You need to plan for coordination and compensation to ensure that your business is not harmed.
For example, if your business employs a carrier to transport your products and the carrier couldn’t keep his end of the promise suddenly for a week. Is there a reserve cargo that can be supplied? Do you have part-time workforce who can ensure that production and distribution work properly?
Using software and tools – mainly SaaS-based – requires building strong resilience against external forces. Having a firewall and antivirus software is not enough. Ransomware is constantly evolving, and supply chains are disrupted as more and more businesses have sensitive information. Back up all data daily or weekly to an external source. It also minimizes the risk of data breaches by avoiding sending personal emails to computers that process large amounts of operational data.
Does future-proofing lead to complete safeguarding?
There is no way to fully secure a supply chain. However, businesses can build resilience and reduce the likelihood of delays, out of stock, and issues with orders and shipments. Understand the strengths and weaknesses of your business, build strong relationships with all sectors of the supply chain, and conduct appropriate training to build knowledge about external variables that can hamper supply chain efficiencies and build resilience.
Companies with the strongest supply chains are those employing multiple levels of resilience. Keep in mind that the supply chain consists of many links, and if one of those links weakens, the entire chain is at risk. Understand the various processes that continue to run your supply chain and delve deeper into the actual internal structure. Identify weaknesses and don’t wait for them to be revealed.