Supply Chain Management and Business Resiliency

Supply Chain Management and Business Resiliency: How Do They Work Together?

Your supply chain is a huge and complicated network, just like your business. Businesses must obtain merchandise from suppliers, who may, in turn, obtain components and materials from their sources, and so on. If one portion of the network fails, the entire system becomes susceptible. It will be easier to resolve issues quickly if you have a better understanding of how supply chains and business resilience work and how efficiently you can manage potential hazards.

 

What is Supply Chain Management?

Supply chain management refers to the management of a product’s or service’s full manufacturing flow, from raw materials to delivery of the end product to the customer. A business establishes a network of suppliers, also known as “links in the chain” to convey the product from raw material suppliers to businesses that interact directly with customers.

 

Business resilience and supply chain management have never been more critical. In the global digital environment, Chief Supply Chain Officers require supply chains that can withstand, adapt to, and recover from major disruptions whenever and wherever they occur. This entails being risk-aware and cultivating a resilient DNA across the supply chain.

 

Process of Supply Chain Management


Traditional supply chain management systems are made up of five components:

1.    Planning

Plan and manage the resources needed to meet a company’s product or service demand from customers. Determine metrics to assess if the supply chain is efficient, effective, provides value to customers, and achieves organizational objectives once it has been formed.

 

2.    Sourcing

Choose vendors to provide the items and services needed to finish the project. Create processes for keeping track of and managing supplier relationships after that. Ordering, receiving, maintaining inventory, and confirming supplier payments are all important activities.

 

3.    Manufacturing

Organize the steps necessary to accept raw materials, create the product, inspect it for quality, package it for shipping, and arrange delivery.

 

4.    Delivery and Logistics

Customer orders are coordinated, delivery is scheduled, loads are dispatched, customers are invoiced, and payments are received.

 

5.    Returning

Create a system or network for returning damaged, excess, or unwanted items.

 

Significance of Supply Chain Management and Business Resiliency

In the manufacturing process, efficient supply chain management solutions reduce costs, waste, and time. A just-in-time supply chain, in which retail sales indicate replenishment requests to manufacturers instantly, has become the accepted standard. The shelves in retail stores can then be refilled practically as rapidly as the goods are sold. Analyzing data from supply chain partners to discover where additional changes can be made is one technique to improve this process further.

 

Businesses can adjust swiftly to interruptions, sustain continuous operations, and protect people, assets, and brand value by incorporating business resilience into their supply chain management. Resilient businesses have the highest chance of surviving a downturn and weathering the storm. Few firms will be able to recover from unforeseen interruptions or react quickly enough to rapid changes in market demand or regulatory requirements unless they have strong business resilience.

 

Building a Resilient Supply Chain


1.    Analyze the Risk

The first step should be to assess the risk in your supply chain. You need to know what dangers each of your suppliers poses, how serious they are, and how to avoid them. You may become more proactive in protecting your business by recognizing the risks connected with each supplier.

 

2.    Take a Long-Term Approach

You should take your time and be proactive when building your supply chain. A reactive solution that entails just-in-time procurement and cash flow management puts your company in danger of running into problems. Organizations frequently overlook the fact that financial incentives can expose them to considerable danger if they focus on apparent short-term rewards rather than a long-term perspective. You may assess prospective threats and ensure that you are not overpaying for potential problems if you have a proactive solution. You can develop a better strategy for yourself and your suppliers if you look at things from this bigger viewpoint.

 

3.    Monitor Your Risks in One Place

You will save time, resources, and confusion by standardizing your business resiliency. Within that framework, the idea is to keep your data consistent. You’ll need a central location to store your facility data, supplier data, and third-party risk data.

 

4.    Be Targeted

You should establish appropriate and inventive mitigation methods after assessing the risks in your supply chain.

 

5.    Communicate What You’re Doing

Your customers, partners, vendors, and investors need to know that you care about the environment and the areas in which you operate. This necessitates clear disclosure of the activities you’re taking to address hazards head-on.

 

 

 

Have Questions?

Want to find out more about how Resilience3™ security, risk, and compliance solutions will improve your business resiliency?