Five Reasons behind Resilient Supply Chain Strategies

Resilient supply chainis a framework of activities that ensure the smooth flow of goods and services in an organization.

Resilient supply chainis a framework of activities that ensure the smooth flow of goods and services in an organization. If a given supply chain is robust, it is able to ensure that there are minimal interruptions in the processes involved. In addition, it is able to ensure that the organization remains profitable. This is because smooth supply chain ensures that products get made, and that they get made on time. It also ensures that raw materials and finished goods get to their destinations in the best conditions possible. If you want your supply chain to remain resilient and reliable, then it is important for you to understand its characteristics, which are enumerated below.

First, a resilient supply chain is able to absorb sudden external shocks, which will not affect the quality or quantity of the product. If you have a strong and reliable supply chain, then you can afford to deal with minor disruption, even if it may be of short duration. Minor disruptions often do not lead to long-term effects, and help the organization meet customer demand. If there is any significant disruption to your supply chain process, such as sourcing, production, or warehousing, then the results can be very damaging. The process of sourcing is vital to any business, as this is the stage where you get in contact with suppliers and manufacturers in order to make the products that you need.

Second, a robust supply chain resilience enables companies to stay ahead of competition. Supply chain is the activity of getting products from point A to point B. This involves massive investments in transportation, gathering of resources, etc. If a company stays ahead of its competitors in terms of supply chain activities, then it will be able to reduce costs, improve efficiency, and stay ahead of its competitors. When any company meets supply chain challenges, then it will have an easier time overcoming any subsequent challenges. For instance, a company that produces five hundred units per month should be able to make up for any increase in demand that may arise because of seasonal weather, and stay ahead of its competitors.

Third, a resilient supply chain helps companies minimize risks related to supply chain activities. Supply chain is an area that is full of real-time risks, such as unexpected delays, supplier returns, and product returns. Each action or inaction of a company due to these risks will have an effect on its bottom line. However, if a supplier meets these challenges, then companies can still reduce their risk exposure, as a supplier that meeting these challenges is likely to be more flexible, willing to adjust its operations to meet the demands of customers, and able to take timely action to resolve supply chain issues.

Fourth, a resilient supply chain improves overall manufacturing performance, as companies spend less time waiting for raw materials, fewer workers get injured on the job, and fewer accidents result in lost production time and money. As supply chains become more complex and sophisticated, they become harder to manage. In addition, these complex supply chains are oftentimes a source of unexpected downtime, which can significantly impact a company's production. When a complex supply chain encounters a problem, it usually goes down faster than expected. A resilient supply chain has the ability to recover quickly, which means downtime is minimized, and production stays unaffected.

Fifth, a resilient supply chain enables a company to deal with sudden unexpected changes in consumer demand. Supply chains that are robust are capable of reacting quickly to changes in consumer demand, as long as the necessary data and intelligence are available. For instance, a global supply chain may encounter unexpected spikes in consumer demand that occur for a number of reasons, such as weather, consumer holidays, oversupply, or supplier problems. In most cases, the demand spike will be temporary and consumers will return to normal spending levels once the demand fades. A robust supply chain allows a company to ride out these fluctuations in consumer demand, without having to experience a long-term hit to profits or inventory levels.


Scott

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