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Moreover, it gives you a competitive advantage if you can recover better than others in your sector. Below are six ways to improve the resilience of your supply chain and increase your competitive advantage.
Look back at the disruptions you have had in recent years and try to learn from them. Ask the following questions, for example:
The above questions and answers form the basis for giving direction to playbooks and contingency plans so that you can act more resiliently in the future.
Because of the diversity of disruptions, there are no ready-made solutions for resilience. The response to one type of disruption can be completely different from the action required for another type of disruption.
Therefore create several contingency plans to prevent disruptions, such as buffer stocks, partnership and visibility in the chain.
It is easier to respond effectively to disruptions in the supply chain when you can see the disruption coming. In some cases a disruption first hits one of your suppliers, and then the disruption can hit you before it hits your customers. Unless one party can effectively contain a disruption on its own, this will have a domino effect on the supply chain. That is why it is in everyone's interest to invest in insight and transparency in the supply chain.
By getting to know each supplier well through meetings and regular communication, you can monitor them better in order to detect potential problems. You can also support your partner during a disruption, to limit the consequences in the chain. Moreover, if your partners trust you, they will be more inclined to work together on a platform to increase transparency in the chain.
Effective sourcing requires a number of new ways of working. The recently popular sourcing strategy of offshoring has become less advantageous, because several types of disruption can weaken long supply chains. Instead, companies are focusing on regionalisation, or sourcing raw materials and finished products from locations closer to where the end product is made or sold. Nevertheless, offshore partners form an integral part of supply chain resilience, particularly because they can support global operations when a disruption hits part of the supply chain. In addition, offshore partners generally offer cost savings, allowing a company to save on other disruption costs. The task of a sourcing and procurement specialist is to find the right mix of global and local sourcing to achieve resilience in the supply chain.
A crucial strategy is to avoid having only one source as far as possible. A simple but effective tactic is to combine offshore and nearshore suppliers for each raw material.
A supply chain is only as strong as its weakest link. That is why supply chain resilience has to be an effort by the entire supply chain.
Work together with your partners in the chain and make sure they understand your plans for preventing disruptions. This strengthens your working relationship and enables them to support your operations better when a disruption occurs
Also make sure that your employees are well informed about your company's protocols and have the physical infrastructure to keep operations running smoothly during and after the disruption.
The best organisations operate with a 360-degree mindset. They make use of their visibility and are aware of market trends for their customers, suppliers, products and carriers, as well as of new technological trends. They use various data sources, anticipate threats and opportunities and take preventive measures well ahead of their competitors. This gives them a competitive advantage.
Companies that lead the way in resilience are market leaders. Companies that focus more on resilience double their revenue during periods of crisis compared with companies that have not prioritised the resilience of their supply chain.
There are few excuses for not investing in resilience. Some companies hesitate because of the costs, but they forget that the costs associated with maintaining the status quo, dealing with yet another disruption, also mean missing out on the competitive advantage. By proactively setting up processes and limiting risks, your organisation retains its resilience and competitive advantage in the supply chain when problems inevitably arise.
UC Group has a dedicated team that focuses on resilience in the supply chain. UC Group can help your company take the next step towards an improved resilience strategy. The start is a qualitative and quantitative analysis, followed by the next steps towards a greater competitive advantage.
UC Group works everywhere: our professionals are based across the Benelux. We welcome visitors at our offices in Rotterdam and Nieuwkuijk. Drop by for a coffee and get to know us!
