Supply chain resilience
Disruptions are always an issue . Are you prepared for the next one ? ask Alexander Wenk , senior business consultant , and Bregje van der Staak , business consultant , at EyeOn
Recent supply chain disruptions caused by the COVID pandemic and a container ship blocking the Suez Canal are indications of the inability of many businesses to react rapidly to unforeseen changes in demand or supply . The current war in Ukraine is showing , yet again , how easily supply chains can be disrupted . Moreover , today ’ s supply chains are global and complex . Thus , the question arises : will you be prepared for future unexpected disruptions ? Why should you reconsider how your supply chain is managed ? There are four main arguments to review in your current supply chain set-up .
Four key arguments
First , the ever-growing politicisation and uncertainty in free trade ( i . e . Brexit ) requires us to rethink how specific supply chains are exposed . Creating strategic inventory holdings is one tactical response to this question . However , a supply chain needs to be remodelled to enable it to mitigate these types of disruptions .
Figure 1 - Circular supply chain
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Second , disruptions have significantly changed how we organise our supply chains . Global supply chains with extensive single sourcing have become exemplary for competitive reasons . However , the COVID crisis , leading to lockdowns and market closures , showed the vulnerability of this structure . Meanwhile , companies are embracing this shortcoming and are embarking on planning strategic responses by developing more resilient supply chains . Third , Gartner predicts , in the supply chain 2021 hype cycle , that supply chain network design will reach a plateau in productivity . 1 This implies that industry leaders are already adopting effective supply chain network designs to deal with the current disruptions . Lastly , fundamental rethinking of supply chains is impacted by aspirations to become more sustainable ecologically . Today companies are optimising their environmental footprint as they have plans to reduce their carbon emissions significantly in the coming years .
Supply chain redesign
All in all , supply chain redesign has the potential to be a structural answer by recognising the common understanding that the best supply chains are usually short . Successfully embedding return flows into existing directional supply chains has been recognised as very desirable . Such circular supply chains require fundamental rethinking about the way they are organised , as most supply chains are designed to end at the point of consumption . With this in mind , connecting the forward and reverse supply chains require modifications to recover value successfully ( Figure 1 ). Similarly , circular planning processes must be redesigned to incorporate return flows . This typically involves waste and disposed products , both of which are alternative feedstocks of the future . However , this poses new challenges . At the planning stage , managing two sources are important : virgin vs . recycled or recovered , in inventory as well as sourcing management , segregating material origins . Furthermore , such material recovery options pose uncertainty in yield and quality for the forward value chain .
Link to supply chain strategy
In your efforts , keep in mind that your supply chain ought to be synchronised with your supply chain strategy . Redesigning your supply chain requires translating your business strategy into supply chain requirements . This demands the involvement of senior leadership , as consistent
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