Building a Resilient Supply Chain is a Continuous Project
By Frank Jones
The supply chain world is continually changing, requiring CSCO’s to stay on top of fast-changing markets, changing partner/supplier relationships, tariffs, increasing customer expectations, and of course, complete global disruptions such as the COVID-19 coronavirus. Staying ahead of these challenges requires a continuous improvement of your supply chain.
Planning for the Unforeseen Disruption
The supply chain world is constantly changing, from the technology, to customer expectation, to how third-party systems around you work with your supply chain. To improve your supply chain capabilities, you need to do an honest assessment of your current process, do some third-party benchmarking, and finally, get alignment with your senior executives. You need to answer questions such as, "What are other companies doing out there now that we haven't even thought about that would help us run our business?" "Where am I trying to get to? How am I going to measure it? How long is it going to take me to get there? How am I going to set up practical projects that I can execute and deliver in timely chunks to show improvement and keep communicating the process both up your chain of command and to your team that's doing the work?" These are the questions that you need to constantly ask yourself as a supply chain executive.
Many organizations at the end of last year realized that they needed to make major changes to their supply chains. The tariffs placed on China created strong reverberations throughout the supply chain industry. Now, COVID-19 is completely disrupting global supply chains at every level for every company, and it highlights the need for a new supply chain model that can enable end-to-end visibility, collaboration, agility, and optimization.
The first step in the process, particularly if you manage a large, complex global supply chain, is to have a strong, cross-functional team that's dedicated to managing disruptive events, whether it's natural disasters like earthquakes, tariffs, or pandemics. You may even want to have a key partner or supplier on the team. The team needs to be held accountable by the CEO, who then gives them priority across the company to do what they need to do to be prepared.
Then, a couple of times every year, you need to create a few geopolitical, environmental, or natural disaster scenarios and have your team do drills based on those disruptions. They should be able to answer questions such as, "If this happened to our data center, our primary data center or set of data centers, what would we do? How would we respond? How long could the company run with IT infrastructure down? How do you back up the supply chain? Do I have alternate supply lines? If this happens, how do I very quickly switch routes and fly around the disruption but still hit my deliveries?"
When you run a drill, your team should have a playbook in place and the emergency infrastructure set up so they can get in touch with the people that need to manage the process. Many organizations today are also driving their suppliers to have these capabilities in place. After the drill, get your team together and find out what worked and what didn’t, and use that intelligence to improve your playbook. Learn, iterate, and add that knowledge into your next drill.
Cloud-Based Solutions Have Transformed Supply Chain Management
This is an exciting time to be in supply chain management, as there are a multitude of cloud-based solutions, such as the Cloudleaf Digital Visibility Platform that are enabling companies to choose and integrate capabilities at a much quicker pace and more cost effectively. Just a few years ago, most supply chain solutions worked around your ERP; that was the engine that ran your company. Now, you can leverage and integrate these new cloud-based solutions at a much faster level. It used to always be the battle of the best-of-breed versus the common enterprise infrastructure. These new technologies are allowing companies to go back to choosing best-of-breed solutions since they integrate pretty seamlessly, because the technology allows you to do that.
In the past, you would have to have your IT shop develop dashboard, logistics, or simulation capabilities, which could take years to complete. Now, you can focus more on your specific use cases that you need to improve your environment and make advancements in your supply chain.
Identify Your Key Issues to Build Resilience and Keep Customers Happy
The biggest questions that supply chain leaders need to be able to answer include, “How resilient is my supply chain? How do I make sure I can support my customers in any scenario? Do I have the visibility required in the end to drive the changes needed and to drive the operational excellence that I need inside my operation?" Those are the key issues that they should focus on in 2020 and beyond. Once you understand what your major issues are, you can identify the projects and providers that you need to fix those issues or gaps within your company.
In terms of metrics you should be developing, start with customer satisfaction metrics. Understand your customer and find out what your customers hold you accountable to – you may have a few different customer satisfaction metrics, but make sure that they are the right things that your customers really care about. In addition, you should develop financial metrics based on your asset management needs, whether that’s inventory, capital, etc. Lastly, you need to develop and apply visibility metrics to your supply chain – they are a critical third piece for leading-edge supply chains. Given today’s pandemic crisis and its disruption on global supply chains worldwide, it’s critical that you start making fundamental changes now to prepare you supply chains for future shocks. A key part of that preparation should include plans for greater visibility into your supply chain.
About the Author
Frank Jones is a recognized global leader in supply chain who served in key leadership roles with Intel for three decades, as well as Unisys Corporation. He is credited with architecting major advances in Intel’s global supply chain, from materials, to manufacturing, to delivery, in both the U.S. and internationally.
Read Frank's previous blog post, Your Underlying Decision Support System is Supply Chain Visibility.