The supply chain is a complex machine, constantly chugging along every day. From manufacturing to transport, supply chains can suffer a number of setbacks or potential problems at any time. A significant part of running any modern business should involve finding ways to increase supply chain resilience, develop models to make strategic changes, and reinforce your supply chain’s integrity.
This process, largely known as supply chain resilience, is a critical component of success in our modern bustling world To better understand supply chain resilience and why it matters to your organization, one must examine the root causes of supply chain problems–and eventually discover new ways to prevent them. Here are five common supply chain problems and how to use supply chain resilience methods to prevent them.
Economic Uncertainty and Inaccurate Planning
Economic issues such as a recession or supply chain bottlenecks can cause untold damage to supply. Bottlenecks occur frequently, especially throughout the recent worldwide COVID-19 pandemic. Production, poor planning, single sourcing, delivery issues, and even raw materials manufacturing shortages can easily become disruptions. When this happens, it leads to bottlenecks. Therefore, finding ways to mitigate and recover are essential. One of the best ways to do this is to develop resilience strategies using demand modeling and supply chain resilience software. With a strong AI tool built-in to help assess data, the existence of a digital twin of your supply chain, and a comprehensive database, such software can help you plan better strategies, diversify your suppliers, and overcome bottlenecks before they can become a problem for your company.
Theft
Theft is another common issue in the supply chain. In 2022 alone, cargo was regularly being stolen from ports, especially around holidays. Each instance averaged over $180,000 in stolen goods. That’s a significant impact from theft alone. To prevent theft, companies can do a few things. The first is to reinforce security and use specialized devices (like shock loggers, impact recorders, and RFID anti theft devices) to protect cargo. Another is to use supply chain modeling and design to prepare routes that offer the most protection from potential theft. Supply chain modeling helps protect you from theft by planning out the most efficient route and identifying weak links in the supply chain. Preventing that is a difficult part of building a more resilient supply chain—and no amount of preparation can completely eliminate it—but defining your models to account for some shrink and unexpected events can help you be more proactive in the case of an incident occurring, instead of scrambling to react when the unexpected happens.
World Events
Geopolitical turmoil and other global events also lead to issues with supply chain resilience. The most prevalent example of this is back in 2020, when the US and China’s trade war began causing supply issues (particularly in tech). Trade was already pretty fragile to begin with, but things took a turn for the worst as time passed. Events like this can have a significant impact on any supply chain. So, you should work it into your models to account for them as much as you possibly can. Obviously, no model is going to be foolproof and help you account for unpredictable geopolitical issues, but it can help you put your finger on the pulse of what’s happening in the world and how it might affect your business. The digitalization of your supply chain can help you anticipate changing business needs and help you adapt as needed when world events occur from time to time.
Natural Disasters
Natural disasters like floods, earthquakes, and hurricanes can also negatively impact supply chain resilience. Natural disasters can cause communication, transportation, energy, and many other problems along supply routes. Physical damage is just the least of your worries, however. Supplies can be lost or more vulnerable during a natural disaster. That’s why it’s important to factor it into any supply chain resilience plans you have for your organization. Make sure you have multiple suppliers available in the event of an emergency (backups are never a bad idea). Review insurance policies and plan for natural disasters along your supply routes. Incorporate it into your supply chain planning on a regular basis. That way, you can stay on top of issues caused by natural disasters and avoid putting yourself in harm’s way if one does occur and ends up adversely impacting your organization.
The Bottom Line
To keep your supply chain resilient, you must be ready for anything. A powerful and complex supply chain resiliency model integrated into your enterprise management systems can help you go from worrying about numerous supply chain problems to discovering new ways to overcome potential problems before they have a chance to grow. Supply chain resiliency software helps you operate on the concept of continuous design, which means you’ll be on top of the industry as it changes and be able to adapt accordingly. Continuous design uses AI and machine learning to help you tweak your supply chain modeling to maximize profitability and sustainability while minimizing risk as much as possible. When used in conjunction with a solid and experienced team, you can take your supply chain resilience to the next level without worrying about the future.
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