While successive crises (the pandemic and the economic, geopolitical and energy crises) have impacted the supply chain across all industries combined, they have also revealed its strong capacity for resilience and adaptation. In an increasingly complex and uncertain world, all logistics directors and warehouse managers have to make controlling their supply chain a top priority. They can achieve this by improving their corporate culture. Today, multiple lessons can be learned to guarantee that global supply chains continue to operate smoothly in any situation.
A resilient and sustainable supply chain
It is strategically vital to ‘reduce our supply chains’ dependence on other countries, especially in Asia. Master plans and associated goods flows must certainly be revised to achieve this,’ says Grégoire Koudrine, Director of the Manutan Group’s Supply Chain.
Diversifying their supplier portfolio or exploring new partners for their operations, especially for critical and strategic procurement, is also essential if companies want to minimise the impact of potential supply chain disruptions.
One of the most obvious responses to such a trend is to shift the supply chain’s focus to more local markets, prioritising the circular economy and short chains. Striving for resilience in supply chains is also highly beneficial as it can become a powerful lever for supporting your CSR strategy (Corporate Social Responsibility).
A resilient and transparent supply chain
Communication and transparency are also increasingly important factors in the resilience of the company and the supply chain especially. In fact, a recent survey by Procurement Leaders and Ivalua emphasises that 77% of the procurement community considers supply chain transparency to be of critical or high importance. Not only because the exchange of information provides greater visibility across the value chain, but also because it strengthens each link in the supply chain while reinforcing shared responsibilities.
For example, this requires manufacturers to give supplier relationships a more collaborative dimension, while at the same time encouraging them to set an example. As Grégoire Koudrine points out, in the future it will be important to ‘get the various parties involved to talk to each other so that they can establish and define turnover, sales and therefore supply forecasts collectively. Only a transversal, shared vision enables you to make the most rational decisions.’
A resilient and preventive supply chain
The spirit of collaboration and consultation that is inspiring today’s supply chain stakeholders, also gives them more visibility. It helps them construct more accurate risk mapping, especially when optimising the management of supplier risks. When they’re better informed upstream, companies are also able to prevent a supply chain disruption, and therefore shortage risks. They can make the right decisions about how to allocate the supplies of resources needed for their production process, how to manage inventories and cash flows and prevent possible market losses.
Companies can deploy several solutions for greater visibility, including:
· Developing alternative operational models, which helps identify new suppliers;
· Creating new alert systems and reporting tools;
· Optimising the reliability of internal and external communication protocols.
A resilient and agile supply chain
By definition, and despite all the precautions a company might take, there is still a certain degree of unpredictability to economics. The agility and flexibility of supply chains are major resilience factors in responding to this.
More than ever, in the current highly volatile market, supply chains must be able to anticipate unforeseen events and/or new needs and adapt to them as soon as they arise, all without this impacting their smooth operation. ‘An agile logistics structure must, most importantly, enable you to change warehouse structuring in record time,’ explains Grégoire Koudrine. For example, as remote working has become widespread, why not offer home delivery for remote working employees instead of delivery to their office when necessary?
A resilient and creative supply chain
In a world undergoing profound changes, innovative solutions have to be found to solve problems. This is what the Zero Based Supply Chain System (ZBSC) was created for. It is based on the principle of creativity, i.e. on a re-examination of current practices, mainly through resetting the company’s cost baseline.
In these highly uncertain times, the logistics cost structure is attaching new importance to variable rather than fixed costs. It could be appropriate to deploy an investment policy focused on data processing and the digitalisation of the logistics chain. The objective is not so much redesigning the supply chain based on a cost-reduction strategy, as it is encouraging a permanent focus on value creation and the emergence of new ideas. Any unforeseen event can be quickly analysed so that immediate solutions suited to the situation can be provided, whether they’re tried and tested or new. This is clearly the way to make the supply chain fully resilient.
For increased resilience, companies must rethink their supply chain management by looking at their corporate culture, to learn what approach would work best for them. Responsibility, communication and skill are the key words for all the links in the chain (workforce, transporters, suppliers, etc.).