A robust and resilient supply chain provides safe and reliable resources for the ultimate objectives of supply. It must not only be able to reliably process large volumes of orders, it must be capable of distributing those supplies to the ultimate locations. A robust and resilient supply chain also has the added benefit of reducing operation costs. In other words, if a manufacturer is able to reduce operational costs, then that manufacturer is more likely to realize a positive ROI (return on investment). In addition to reducing costs, a resilient supply chain also increases the company's ability to generate profits.
A robust and resilient supply chain has a number of key components. The most critical element is an effective risk management strategy. This includes both a proactive and reactive measure approach. By taking a proactive approach, a company can reduce the probability of an unexpected event disrupting a scheduled process or product. On the other hand, if a company takes a reactive approach, such as following the occurrence of a disruption to a previously planned process or product, then a company can better prepare for, and more effectively recover from, any resulting disruptions.
Another key aspect of resilient supply chains is an effective and efficient global sourcing process. Supply chain processes that allow suppliers to communicate and meet with one another efficiently and reliably are critical to ensuring that a company's products are procured in accordance with timelines and budget constraints. Effective and efficient global sourcing facilitates the sharing of information between suppliers and the ability to easily track and trace products during supply chain processes. Moreover, efficient global sourcing reduces the risk of interruptions in supplies caused by delays or interruptions in the performance of one or more critical elements of the supply process.
An important yet often overlooked factor is an element referred to as operations planning and recovery. Operations planning is the management of all resources during the course of a supply chain to ensure that e.g. physical inventories are made, delivered, utilized, replenished, returned and so forth. This includes both e.g. identifying which assets are critical, when these assets are required, why they are required and where these assets are physically located.
In the case of supply chains, adequate operations planning and robust communication channels are critical to managing and stabilising the resilience of the chain. This includes assessing all factors that may potentially disrupt a chain, including potential threats to the entire chain and identifying mitigation strategies. For example, if a pandemic occurs in a particular geographic region, it is important for a manufacturer to assess the risks to the entire chain of their manufacturing plants, as well as the viability of their own supply base in that region. Similarly, if a disruption occurs in the speed of a particular chain element, companies must quickly establish a corrective plan to mitigate any resultant disruptions.
In conclusion, one of the key components for sustainable supply chains is transparency across the entire organization. Resilient supply chains are made possible by ensuring that internal communication channels can inform each other of key events and opportunities within the supply chain, such as fluctuations in operational parameters or the delivery of critical assets. Digitalization, however, must be combined with efforts at higher levels of production efficiency, increased productivity, improved logistics, reduction of cycle times and increased knowledge about manufacturing processes and assets. In essence, digitalization requires companies to not only produce more, but also make the process transparent - this can be done through improved communication, better quality control and greater transparency across the whole organization.