How to Build a Resilient Global Supply Chain for Your Company

How to Build a Resilient Global Supply Chain for Your Company

It doesn’t matter what industry your business is in. Climate change and growing geopolitical instability trends mean that your business’s supply chains are becoming increasingly susceptible to disruptions from natural disasters, increased tariffs, labor and technology availability, and economic fluctuations. If you don’t plan for this unpredictability, delays, shortages, and increased costs are sure to affect your bottom line. However, by adequately accounting for these supply chain variables, you may be able to turn these threats into valuable growth opportunities.

With the world becoming more complicated and less predictable with time, investing in resilience should be at the top of your company’s priorities. As reasonable as that sounds, restructuring existing supply chains to enhance resilience can be resource-intensive and can sometimes be a source of inter-organizational conflicts. Fortunately, the principles of building a strong yet flexible supply chain remain broadly similar, regardless of your industry.

Here are a few actionable tips to build a supply chain that will facilitate business in any circumstance:

1. Diversify Your Supplier Base

Relying on a single supplier or region for all your production inputs increases your vulnerability to disruptions. One unexpected natural disaster or political event can cause a stoppage in your supply chain and make it impossible to fulfill your orders. Stockpiling vulnerable items can work, but the only way to guarantee a consistent supply would be to engage multiple suppliers across different geographic areas.

This approach (known as multi-threaded procurement) allows for business continuity if one source encounters any issues. For instance, in addition to having an onshore supplier, you can also set up offshore product sourcing in India so that local weather or labor issues can’t completely hamper your production.

2. Improve Supply Chain Visibility

Despite transportation being faster than ever, today’s supply chains often cover immense distances and involve multiple parties. At each point of the chain, there are opportunities for delays and even complete losses of valuable production inputs. Much of the time, many of these events are easily avoidable through the use of transparent tracking systems.

Setting up real-time tracking systems throughout as many points of the supply chain as possible will increase visibility, strengthen accountability, and enable faster identification of potential disruptions. Today, technologies like IoT (Internet of Things) devices and blockchains can provide excellent end-to-end transparency, enabling timelier supply chain management.

3. Invest in Better Automation

The human factor is, by far, the most fallible component of any supply chain. As a rule of thumb, the more you reduce human inputs in repetitive areas, the more dependable your supply chain becomes. Adopting emerging tools such as AI, machine learning, and robotics can streamline your operations and reduce the opportunities for human error.

Automation enhances efficiency and allows for near-instant adjustments in response to changing conditions. For instance, predictive analytics can forecast demand fluctuations, allowing you to place the ideal order amounts for a given period, reducing your warehousing demands, and keeping you from tying your cash up in inventory. As a bonus, setting up your process automations will also smoothen out any scaling issues associated with business growth or contraction, conserving your operating capital.

4. Develop Stronger Relationships with Core Suppliers and Logistics Partners

Even when times are good, you want to pay your suppliers on time and keep your relationship positive. This is so that when disasters strike, you want to make sure that you are still given top priority by your suppliers. Investing in good relationships today may be key to continued service well into the future. Once you make it clear to your partners that you value them, they will be much more likely to respond in kind.

5. Build a Culture that Anticipates and Responds to Changes

Keeping your workforce primed to move is almost certainly going to be uncomfortable, but it’s necessary to guarantee business continuity. All internal stakeholders, from the C-suite down to line employees, must have a mindset that consistently looks to the future—even as they manage today’s supply chain hurdles. This will keep your organization agile and always ready to handle disruptions of any kind.

Emphasizing Smarter Supply Chains Lead to Future Business Innovation

These strategies can all be readapted to work for any kind of business, from manufacturing to services. Still, if you’re a business owner or supply chain manager, you must try to avoid the trap of simply following what others have done before. These ideas can provide a foundation but it is up to you to make them work within the context of your business.

In any case, the most important thing is to maintain a culture of proaction. Being proactive with your supply chain management and other facets of business will enable you to see threats before they really become a problem. More importantly, it will empower your organization to become consistent in meeting emerging market needs. Given the accelerating pace of change, supply chain improvements can even be seen as an opportunity to optimize your business for consistent growth.

Leave a Reply