The Temple of Supply Chain Resilience
The Temple of Supply Chain Resilience - Prof Richard Wilding OBE
Building a resilient supply chain is increasingly important for all organizations. It is however something that cannot be done overnight. It involves all areas of the business and requires an effective strategy and will impact on everything from product and service design to the cultures required within the business. If you are concerned about risk & vulnerabilities in your supply chain build the “Temple of Supply chain resilience”, this blog (and video) briefly outlines how to build this temple.
The foundation needs to an effective supply chain strategy as this impacts on the risk profile of the supply chain. Supply Chain Strategy requires clear linkage to the Competitive strategy of the business and will define the Supply Chain Processes, Infrastructure, information systems and supply chain organization (how people within the supply chain relate.)
The floor of the Temple needs to be “Product Design for supply chain management”. Supply Chain Risk is often embedded during the design stage for a product. Consider the raw materials used and where these will be sourced from, can a design utilize different materials e.g. aluminum or steel?, Can the product be designed so it can be configured as close as possible to the customer for enabling different products to be configured according to the customer’s needs?.
Now build four pillars. Firstly Agility to ensure flexibility within the supply chain operations, secondly build collaboration internally and externally, the more you collaborate the greater the resilience you can achieve. Third get a supply chain risk management culture embedded so when people make any decision they ask one simple question “How will this impact on the overall risk profile of my supply chain?” Don’t allow people to make decisions without thinking of the impact this will have on others within the chain. For example, purchasing from one nation may be less expensive but what about lead-time, risk of disruption and potential inventory increases. Fourthly, supply chain design – consider the locations and network you use, and the equipment you use. For example, global sourcing will change the risk profile, a forklift truck on lease may seem a good idea but where are the spares sourced from? Make sure you ask questions and understand the impact of decisions.
Now you need to top off the temple with a roof of supply chain transparency. Ensure you have high levels of transparency across your product flows and network. Transparency is required to reassure all that the supply chain is operating effectively this requires connected information systems and good communication, but also simple paper based supply chain maps can be utilized so all have a clear understanding of the supply chain.
Finally the crown of the roof on the temple is continuous monitoring and intelligence. Make sure your employees, suppliers and customers have ways of keeping you informed of issues so you can act quickly (hopefully quicker) than your competitors so you can always keep ahead, securing the resources you need to keep your supply chain operational.
The floor of the Temple needs to be “Product Design for supply chain management”. Supply Chain Risk is often embedded during the design stage for a product. Consider the raw materials used and where these will be sourced from, can a design utilize different materials e.g. aluminum or steel?, Can the product be designed so it can be configured as close as possible to the customer for enabling different products to be configured according to the customer’s needs?.
Now build four pillars. Firstly Agility to ensure flexibility within the supply chain operations, secondly build collaboration internally and externally, the more you collaborate the greater the resilience you can achieve. Third get a supply chain risk management culture embedded so when people make any decision they ask one simple question “How will this impact on the overall risk profile of my supply chain?” Don’t allow people to make decisions without thinking of the impact this will have on others within the chain. For example, purchasing from one nation may be less expensive but what about lead-time, risk of disruption and potential inventory increases. Fourthly, supply chain design – consider the locations and network you use, and the equipment you use. For example, global sourcing will change the risk profile, a forklift truck on lease may seem a good idea but where are the spares sourced from? Make sure you ask questions and understand the impact of decisions.
Now you need to top off the temple with a roof of supply chain transparency. Ensure you have high levels of transparency across your product flows and network. Transparency is required to reassure all that the supply chain is operating effectively this requires connected information systems and good communication, but also simple paper based supply chain maps can be utilized so all have a clear understanding of the supply chain.
Finally the crown of the roof on the temple is continuous monitoring and intelligence. Make sure your employees, suppliers and customers have ways of keeping you informed of issues so you can act quickly (hopefully quicker) than your competitors so you can always keep ahead, securing the resources you need to keep your supply chain operational.
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