Supply chain resilience offers companies so many advantages that there are almost too many to count. In reality they all add up to the ultimate business benefit: long-term survival. And given the fact that the next disruption is always just around the corner nowadays, it’s one that your organization can’t afford to miss out on.
The benefits of supply chain resilience have never been more apparent – or more important – than in the current times, in which businesses are being rocked by repeated waves of disruption from multiple angles. In fact, the world seems to be growing even more volatile, uncertain, complex and ambiguous (VUCA) by the day. It is at times like these that the gap between the winners and the losers widens. During recent disruptions such as the Suez Canal incident and the COVID-19 lockdowns, I have seen numerous examples of how supply chain resilience has helped companies to not only deal with the uncertainty, but also to actually emerge from the crisis stronger than before.
But how exactly does supply chain resilience help them to achieve that? In my view, the driving force is collaboration, which is one of the four key pillars of supply chain resilience (along with supply chain design, behaviour and agility). There are so many benefits to be gained by improving communication and collaboration, not only within your own organization but also within your entire supply ecosystem. This forms the basis for a more dynamic (forward-looking) approach to risk management by enabling you to spot early warning signs of any potential changes in supply or demand so that you can take the necessary action swiftly.
Moreover, business decisions often involve conflicting interests, which can make it difficult to know what to do – especially in times of crisis. Better collaboration enables you to gain transparency into all the relevant information. As a result, you can carefully weigh up the pros and cons and take short-term corrective action, without becoming distracted from your long-term objectives – even when you are surrounded by uncertainty.
Putting supply chain resilience into practice
You might be thinking that this all sounds great in theory, but how can you improve your collaboration in practice? The good news is that integrated business planning (IBP) provides an ideal framework for this. It creates a structured approach for gathering and analysing the latest business intelligence from all the relevant disciplines – including, importantly, Finance – and gives you visibility into not only the operational impact, but also the tactical impact of any changes you plan to make. This enables you to make fast and effective decisions based on trade-offs (e.g. stock versus working capital, production planning versus capacity). It also helps you to break down internal silos, strengthen stakeholder involvement, identify any information or supply gaps in your value chain, conduct scenario planning, assess the potential risks and anticipate all kinds of uncertainties that lie ahead.
"With the next disruption always just around the corner nowadays, it’s time to start reaping the ultimate benefit of supply chain resilience"
Key for long-term success
Supported by a solid process such as IBP, supply chain resilience results in so many benefits that there are almost too many to mention here, but here are a few for starters: less time spent on fire-fighting (freeing up more time to anticipate and plan ahead), more stability and continuity even in times of uncertainty, more responsiveness to take advantage of market opportunities, more goodwill thanks to ‘rescuing’ existing (and new!) customers in their hour of need, more agility to recover from disruption faster – and stronger – than your competitors… do you get the picture? All of this helps you to create competitive advantage so that you can maintain and ultimately grow your market share and support a healthier bottom line. And that, as we all know, is key for long-term success.
So supply chain resilience clearly offers numerous benefits. However, while IBP is a good place to start, it’s not a quick fix. Supply chain resilience is a continuous process that should be seen as a new way of life for your company; it requires a lifestyle change so that it becomes firmly embedded in your organization’s DNA. This means developing a clear vision and conveying the importance of resilience – the ‘why’ – from the top down, including consideration of any internal cultural differences. This may sound like too much effort. But given the fact that the next disruption is always just around the corner nowadays – as the war in Ukraine has demonstrated – can you afford to wait any longer? It’s time to start reaping the ultimate benefit of supply chain resilience: your long-term survival.
If you want to find out more about how you can unleash the benefits of supply chain resilience, whether by implementing IBP or in other ways, contact me or download our whitepaper.
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