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Building a Resilient Supply Chain

May 19, 2023
Last Updated:
July 23, 2023
5 min read

✔️Learn how to build a resilient supply chain to enhance adaptability, optimize efficiency, and minimize disruptions for long-term business success.

Building a Resilient Supply Chain

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In today's ever-changing global business environment, having a resilient supply chain is essential for companies to remain competitive.

Recent research has found that nearly two-thirds of businesses have experienced supply chain disruptions due to changing economic and political conditions over the past five years.

This highlights the importance of building a resilient supply chain that can withstand external pressures while continuing to meet customer expectations. With this in mind, it is clear that resilience must be at the heart of any successful modern business strategy.

Fortunately, there are a number of measures that businesses can take to improve the resilience of their supply chains. In this blog post, we’ll explore some key steps in building a resilient supply chain.

What Is Supply Chain Resilience?

With the ever-changing global market, unpredictability often becomes challenging in most supply chains. As shippers, you face constant issues such as supplier closures, natural disasters, and port congestion, which can significantly affect your business operations.

In a nutshell, supply chain resilience is the ability to anticipate and adapt quickly to any external disruption.

Resilient supply chains aim to ensure that all stakeholders maintain a reliable flow of goods, services, and information. This helps businesses maintain a competitive edge and protect their bottom line.

Benefits of Supply Chain Resilience

benefits of supply chain resilience

#1 Risk Management

Avetta reports that 85% of companies face at least one disruption in their supply chain annually. Having a resilient supply chain in place can help minimize risk by allowing companies to quickly identify and address issues before they become more serious.

Resilient supply chains also allow companies to reduce the number of potential risks they face and better manage existing risks.

#2 Cost Savings

A recent survey by GEP, based on responses from 400 senior-level executives and conducted by The Economist Impact, reveals that companies prioritize agility and resilience over cost savings in their strategies. However, one does not exclude the other.

While building a resilient supply chain won't directly increase profits, it can help reduce costs associated with disruptions. By having a resilient supply chain in place, companies can better protect their investments and put themselves in a better position to identify and capitalize on opportunities.

#3 Competitive Advantage

Having a resilient supply chain gives you an edge over your competitors. By being better prepared to handle disruptions, you can quickly pivot and adapt to changing market conditions, giving you a competitive advantage.

A recent study found that building supply chain resilience directly and significantly impacted sustainable competitive advantage. Companies that were able to make quick and effective decisions in response to supply chain disruptions had significantly higher performance than their non-resilient counterparts.

#4 Better Customer Service

In 2021, retailers faced delivery disruptions due to supply chain issues, and only 20% of consumers were willing to forgive them for it. With the rising customer expectation for on-time delivery, having a resilient supply chain is key to staying ahead of the competition and providing customers with the best service possible.

By having a robust and efficient supply chain in place, you can better manage customer expectations and prevent any delays or bottlenecks that could impact the quality of your service.

5 Tips for Building a Resilient Supply Chain

building a resilient supply chain

#1 Implement Risk Monitoring and Management

Anticipate future supply chain disruptions and put a plan in place to manage them. Use risk monitoring tools like supply chain mapping to identify potential risks before they become an issue.

Also, have procedures ready ahead of time for responding to disruptions and mitigating their effects.

#2 Safeguard Your Data

Data is the lifeblood of modern businesses. Make sure that your company's data is protected by investing in security measures such as encryption and disaster recovery systems.

You should also have a plan for managing access to sensitive data and backup systems in the event that your data is compromised.

#3 Maximize Supply Chain Visibility

Utilize technology solutions that provide real-time visibility into the supply chain in order to identify any issues or disruptions that could impact operations quickly.

Cargoflip offers real-time shipment tracking that gives you a 360-degree overview of in-transit goods and enables you to react quickly to any disruptions. To help you take off, we're providing a no-cost trial.

#4 Focus on Collaboration

Successful supply chain resilience requires collaboration between all parties involved. Foster relationships with suppliers, vendors, and other partners and ensure that everyone is aligned on objectives, processes, and communication protocols.

Establishing long-term partnerships with reliable suppliers and having an extensive supplier network can provide you with what is needed while also allowing flexibility when it comes to responding to disruptions.

#5 Invest in Automation

Automation can increase efficiency and reduce the potential for human error. Implement tools that automate processes like order processing and inventory management to reduce reliance on manual labor and minimize disruption in the event of an issue.

A new report by Precisely and SAPinsider has investigated the importance of process automation in achieving digital transformation objectives. The research found that a staggering 89% of respondents believe process automation is improtant in the supply chain. Unfortunately, the report also highlights a significant gap between where the industry is and where it should be. Over 70% of participants stated that less than half of their supply chain processes are currently automated.

This indicates that investing in automation could be a key factor in building a more resilient supply chain, and one that puts you ahead of your competitors.

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Example of a Resilient Supply Chain

An example of a resilient supply chain is a global automobile manufacturer, BMW, that produces and assembles its vehicles in different countries, with an extensive supplier base.

BMW is focusing on three areas: supply chain, production, and reducing carbon emissions during the use of their cars. To ensure a resilient supply chain they've included the following in their strategy:

  • Diversified Production: This involves manufacturing vehicles in different countries, with several production facilities located in separate regions to minimize the risk of disruption.
  • Multiple Suppliers: Working with 12,000 suppliers in 70 countries, including numerous indirect and direct or tier one suppliers, they are to quickly source components in the event of a disruption.
  • Automation: The company has invested heavily in automation technology, such as robotics and 3D printing, which can reduce errors and improve efficiency.
  • Continuous Monitoring: BMW also uses data analytics to monitor all aspects of their supply chain and identify potential disruptions before they occur

Overall, the above precautions and contingencies demonstrate BMW's resilience and ability to adapt to supply chain disruptions, thereby allowing the firm to continue delivering products uninterrupted to their customers.

Future-Proofing Global Supply Chains

A supply chain is only as strong as its weakest link. To build a resilient supply chain, you need to implement the right processes, technology solutions, and partnerships to ensure you outperform the competition.

By focusing on risk monitoring, safeguarding data, incorporating visibility solutions, fostering collaboration with critical suppliers and vendors, and investing in automation, you can create an agile process that will withstand any supply chain disruption.

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