Crucial steps for supply chain resilience
A company’s supply chains are vulnerable to sudden economic or medical crises, whether global, national or local. Nick Wildgoose outlines how to keep them strong.
A McKinsey Global Institute report in 2020 suggested that supply chains will face disruptions lasting a month or longer every four years. With this in mind it is perhaps worth starting with the definition – a supply chain is a set of three or more organisations linked directly by one or more of the upstream or downstream flows of products, services, finances, and information from a source to a customer. Supply chain risk or resilience management involves proactively managing the two-way movement and coordination of goods, services, information, and funds from raw material through to the end-user. It also involves ensuring the supply chain complies with relevant regulations and does not damage your reputation, baring in mind there is an increasing expectation that you take responsibility for the multi-tiers within your supply chain.
The increased globalisation and outsourcing of elements of production or service provision have inevitably introduced increased complexity to supply chains. This greater complexity, combined with commodity, financial, pandemic, climate, and political uncertainty has elevated everyone’s awareness of risk. Supply chain risk management has become an increasingly important process in driving overall organisational performance. It is also important to realise that risk in a supply chain can equate to cost, for example a part not arriving and a production line stopping with the consequent costs involved.