When it comes to supply chains, normalcy will not return very soon, if at all. “We have no time to wait and find ut. Being lucky is not a plan, “said Bindiya Vakil, co-founder and CEO of the supply chain data monitoring firm Resilinc. On the plus side, according to Vakil, we are much better able to handle the numerous risks we face because we now have access to so much more data, artificial intelligence, machine learning, and predictive analytics.
Fundamentally, risk is a data issue. We must invest in tools that lower it, including predictive analytics, which help us foresee and prepare for many outcomes. After that, we must convert this data into a revenue impact and set priorities accordingly.
This begins with determining which of your resources are most essential to your purpose, then establishing a reliable supply chain for those while being flexible with the others. Keep in mind that pricey does not always equate to mission-critical. Even though we’ve been trained to view our supply chain in terms of expenditure, low-cost goods frequently have the power to drive us to our knees.
It’s also crucial to gather information on all of your suppliers and use a risk algorithm to identify which are financially problematic.
Actively interact with vendors
Data can assist you in developing a close relationship and active interaction with your suppliers that can produce significant benefits. Vakil, for instance, talked about how Toyota used supply chain mapping and monitoring to spot the necessity for early semiconductor stockpiling. As a result, the company outperformed its rivals, grew its market share, and ascended to the top of the auto industry without suffering the negative impacts of the semiconductor shortage.
Increase your supply chain expertise
Risk is a people issue as well, and this risk is increasing as businesses struggle to respond to disruptions quickly and efficiently due to a talent shortage. The isolation brought on by COVID-19 has already had an impact on the existing teams’ productivity and mental well-being, and the demand for supply chain skills has expanded faster than the supply. To run new systems and recognise patterns, supply chain management must find the ideal organisational setup and personnel.
Time spent on hiring and rising wage inflation cause diversions, continuity problems, and more difficult hurdles for staff retention as businesses compete for talent.
Spend money on a reliable data base.
Visibility of data and good leadership can help you plan ahead and react swiftly to changes in a world that is undergoing rapid change. Companies are reconsidering their supplier networks, nearshoring, and finding new ways to source raw materials due to factors including geopolitical threats and the climate issue.
To support such decisions, it’s critical to establish a solid data foundation and maintain data quality. Making sure a data practise is integrated into the supply chain may prove difficult in organisations with rigid organisational structures. To manage risk and to preserve, watch over, and continuously improve your data, you need visibility.
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The internationalisation of the supply chain has increased the risks associated with bad data and lack of visibility. The knock-on effect of interruptions has increased in frequency and severity as supply chains have become more reliant than ever. Organizations are spending money on sophisticated planning software, control towers, and the automation of manual activities in order to improve visibility, responsiveness, and efficiency.
However, the digitization of supply chains also increases the risk of cyberattacks. Forward-thinking supply chain managers are encouraging and requesting their suppliers to improve their cybersecurity while also strengthening their own defences.
I believe that occasions like this enable us to share best practises for this era of significant transformation as supply chain leaders take their proper place at the executive table.