Here are 5 tips to ensure that the volatility in Supply Chain does not disrupt your business:
1. Analyze the supply chain
This is step numero uno in proactive supply Chain management. While many organizations tend to look at operations exclusively within their own enterprise, the extended network outside their vicinity remains unknown terrain. So, it’s a good idea to start with knowing what’s going on in the offshore factory, or who is coordinating with the shipping partner while moving a shipment.
Sample this: ecommerce retailers look only at consumer-facing technologies and needs that they have no idea what their shipping partner does. Such negligence can come back to haunt them.
Companies with successful proactive supply chains analyze their weakest links and they don’t stop with their own four walls. They need to look at every process between source and destination.
2. Connect Electronically
From vendors, shipping vendors, core organization, other ends of the supply chain are all connected electronically to a common set of data, transactional information is communicated to everyone at the same time. In case there is an exception, changes can be broadcast to appropriate parties across the supply chain. In fact, new age supply chains connect the chain with social networking and cloud computing. All these greatly facilitate data collection and sharing. There is the advantage of having pre-set alerts that trigger need-to- know parties and a central repository of information for partners to access.
3. Anticipate road blocks
Most transactions in a supply chain do not go as per plan. That is reality. There are weather related issues cropping up everywhere, any time. The chain will encounter hiccups all the time. So, for every anticipated issue, there needs to be a pre set plan of action. And yet, there will be unprecedented issues. The people and systems in the supply chain need to be able to manage process and change by exception. A good proactive system looks out for early warning signs and alerts and acts on them accordingly. If something other than usual happens, the system changes path in accordance with a set of pre-determined parameters and necessary parties are notified immediately. To identify exceptions before they become emergencies, companies have thresholds for parameters that determine tolerance levels: yellow, orange, red flag triggers. With all this, there is also a system of escalation procedure that scales response according to urgency and alerts appropriate people.
4. Set up Alternative Plans
For every plan A in a proactive supply chain, there is a Plan B and Plan C. This is very important.There needs to be alternative destination paths set up in case of emergencies. And these need to be integrated with standard operating procedures. There are also trial runs for these contingency plans to make sure they are fool proof.
5. Manage by Exception
Running a business today is overwhelming. The number of parameters that impact your supply chain is mind boggling. And apart from all this, exceptions occur. When these occur, the company needs to make fast and informed decisions. That is very different from rushed and rash decisions and such rash mistakes are because they do not have a bird’s eye view of the situation. So, an exception based plan of action is very important.