Increased concerns on supply chain risk aversion led participants at the 2012 World Economic
- Policy: Create a multi stakeholder risk assessment process.
- Strategy: Provide incentives to organizations to implement agile, adaptable strategies for common resilience.
- IT: Improve risk identification and responses through expanding the use of data sharing platforms.
- Partnership: Harmonize, develop and adopt resilience standards.
The above 4-tiered approach can save organizations from disruptions caused by natural disasters, extreme weather, conflict and political unrest, terrorism, sudden demand shocks, export/import restrictions among other factors.
Technologies for Building Resilient Supply Chains
1. Continuity of information technology within IT.
IT can mitigate supply chain management risks through data and information sharing, pre-programmed responses, and scenario modeling. Information sharing through access to data in real time and data driven supply chain fixes enables business continuity.
However, for resilient information sharing, robust infrastructures supporting a resilient core network with an element of redundancy and appropriate communication tools are required. This means that the IT systems used should be re-routable, secure and scalable.
Aircraft manufacturer Boeing offers a good example of IT-enabled resilience. As supply chain issues resulted to delays in the production of the 787 by 3 years, the company partnered with suppliers like Alcoa to engage in a collaborative planning, forecasting and replenishment (CPFR) exercise.
In the CPRF exercise, IT systems were integrated to allow real-time data exchange between Alcoa and Boeing. This improved forecasting accuracy enabling the supplier to adjust its production process for maximum efficiency.
2. Expanding use of data sharing and platforms for risk identification and response.
Governments and worldwide industry groups can make supply chains more resilient through expanding use of data sharing platforms for risk identification and response and institutionalizing broad-based risk assessment process. There is need for a standardized risk vocabulary, implementation of more flexible strategies and improved data sharing along and between supply chains.
Companies in the private sector can adhere to public supply chains risk resilience guidelines in addition to making their own chains more risk-resistant and resilient. The use of exercises to stress-test assumptions and plans, and the development of trade resumption plans are two priorities that should be addressed by private sector companies.
3. Bar coding
Bar coding can also improve operational efficiency, visibility of key business information to management and better customer care. Bar cording improve speed and accuracy of products passing through the supply chain, and also ensure data integrity.
Technologies That Can Bust Your Supply Chain Strategy
4. Software in a box
Software-in-a-box solutions reduce organization efficiency because of the lack of a tailored solution. Use of the software results in lower efficiency due to use of non-standard software with features that are incompatible with other supply chain elements.
5. E-Commerce
While many consumers shop on the internet, suppliers delivering their products on the Internet experience increased operational costs. The need to have robust infrastructures to hold your customer’s data and PCI compliance issues are costly. On the other hand, leaving your customer information in the hands of a middle man means you will pay for the convenience.
6. Innovative packaging
Irregular packaging can use space more efficiently but affect the overall reduction in number of products you can pack. This leads to high packaging costs per product. At the same tome, the raw materials used to create innovative packaging can cost more than normal packaging because of elements of design.
7. Tablet computing and texting
Debatable technologies like tablet computing may improve your supply chain efficiency depending on your industry. Organizations in the paper and pulp industries lose marketing. On the other hand, companies that offer managed computing services benefit from the technology.
Individual players cannot mitigate supply chain systems risk by themselves. Risk management must be explicit but an integral part of the supply chain governance.