Supply Chain Resilience is not just for tsunamis and plant fires. The steps you put into place to prepare for manufacturing catastrophes should also benefit your daily operations and bottom line. How quickly we forget the chaos that ensues for supply chain practitioners after a major disaster. Almost a year after the tsunami hit Japan, the harrowing headlines about the failures which will ensue if you’re not adequately prepared are gone and we’re back to business as usual.
Supply chain organizations should use the downtime between calamities to prepare for one of their own without implicating themselves into radical excess inventory strategies nor accept poor customer service as the outcome should an event arise. To prepare, here are 3 Steps to ensure profitability in the wake of disaster, as well as in every day supply chain:
1) Enable End-to-End Visibility – With the modern day “interconnected supply chain” suppliers and manufacturers depend on each other, and customers depend on both to provide them with a valuable end product deserving of its price. Put systems in place that allow rapid and real-time data exchange so everybody always has the most up-to date information.
2) Look at your supply chain’s level of execution – When disaster strikes you need to know exactly how much inventory you have to service your customers. Parcing your supply chain down to the execution level gives you an accurate understanding of quantities available so you aren’t overpromising
3) Put actionable steps in place – Strategy is no good unless it’s executed and you shouldn’t settle for best practices telling you what you should do. Technology is available that tells you which decisions are profitable, and which will only serve to undermine your bottom line.
Imperial Sugar’s decision to use Demand Foresight as their demand forecasting tool helped them stave off great losses after their plant explosion in 2008. What’s the longest amount of time your plant could be offline before orders went unfilled? How would you allocate the remainder? You might have not asked these questions since last month or last year. Just remember – the supply chain process and technology you have in place today will have to serve you in a disaster tomorrow. Make it profitable.