How To Evaluate A Resilient Supply Chain
4 min read
A resilient supply chain defines the ability of a system to tolerate and respond to sudden changes in conditions that affect its supply. This may involve sudden temperature swings, sudden mechanical pressure, or sudden ecological changes. These events can cause interruptions in the usual flow of production and lead to interruptions in the normal operations of the business. In some cases, these interruptions lead to interruptions in the customers’ ordering systems. This calls for fast detection and rapid response to maintain or increase customer volume.
Customers’ requirements change rapidly and this is why big data analytics has been one of the key features of resilient supply chain technologies. It helps to monitor the status of orders and supply chain and identify any anomalies that could lead to shortfalls and interruptions. This helps to promptly rectify problems that could result in loss of business. Hence, having the ability to predict and prevent the adverse effects of an adverse change in conditions affecting the supply is very crucial.
There are many companies across the globe that are leveraging on robust supply chain technologies to improve their overall profitability. However, there are still many companies that do not have access to these systems. There are many reasons for this such as cost and time. Some of these costs are not easily quantified and companies do not have the time to invest in setting up a robust supply base.
When assessing the strength of a company’s resilient supply chain, there are a number of key areas that need attention. The first and foremost area is the physical capacity. The physical capacity refers to the capacity of the distribution system that can cope with the sudden fluctuations in demand that often lead to unexpected disasters. The physical capacity assessment can be performed through various methods including forcefulness testing, data analysis, and simulation. It should be able to provide sufficient data to forecast any changes in the future demand which can be used to mitigate any potential disasters that may lead to loss of sales.
Another area of strength in a resilient supply chain system relates to the emotional capacity. Emotional capacity encompasses customer, supplier, and business relationships and can provide the most essential clues on how to develop a system that is robust. Often times, supply chain systems are evaluated by looking at how well suppliers have been impacted by any external events or trends. On the other hand, the customer’s experience is critical in measuring the resilience of the system.
Finally, the last area of evaluating a resilient supply chain involves studying and evaluating the industry in which the manufacturing company operates. It is important to review how the sourcing activities impact on the sourcing market. The industry that produces the product can often determine the type of vendors that are used in the production of the product. For instance, if the product is manufactured in the automotive industry then there are different vendors that can be considered than if the product is manufactured in the chemical industry.
In addition to evaluating the companies’ impact on the supply chain, a company should also consider the impact that their activities have on the overall customer demand. This includes reviewing whether customer demand has been negatively affected by the sourcing activities. The assessment should examine both the supply and demand sides of the customer relationship to identify any potential impact that the company has had on the current or future demand for their products. If the company is able to decrease the disruption to the customer, the companies’ ability to increase customer demand may be impacted. Furthermore, if the customer demand is not decreased, the amount of product lost due to the interruption may still remain unmet.
The evaluation process for a resilient supply chain should consider all of these different areas and consider the long term effect of any changes. It is important to evaluate the impact that suppliers and their activities have had on the overall supply chains. Although it may seem like a short-term problem, interruptions can have long-term effects on a company’s ability to generate revenue. For suppliers, disruptions caused by unexpected events or unforeseeable circumstances can create a ripple effect and have a significant effect on the business. These types of interruptions can occur at anytime, which makes it difficult to plan for them in advance. The assessment should address how any potential problems impacting the supply chains can be mitigated in order to ensure that the business can continue to operate smoothly.
