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Uninterrupted supply chain: Streamlining for protection

Posted: 10 Oct 2014 ?? ?Print Version ?Bookmark and Share

Keywords:supply chain?

The speed at which manufacturers introduce new gadgets to the market is changing the supply chain landscape, requiring streamlined operations to meet market demands, reduce costs and become more customer-centric.

In working to balance such priorities, executives also factor in risk mitigation in the supply chain, writes UPS Director of Marketing Ken Rankin. In the process, he indicates an opportunity to become more knowledgeable and proactive in managing supply chain risk.

Citing a July 2014 report from UPS Capital and the University of Tennessee, Managing Risk in the Global Supply Chain, Rankin points out that identifying and mitigating supply chain risks remain a weak area for many global companies, as 90 per cent of companies responded that they do not formally quantify risk when outsourcing production, the report found. Moreover, of the 66 per cent of companies that have risk managers, virtually all their internal functions ignored risk in the supply chain.

Rankin lists several key considerations that every high-tech decision maker should keep in mind to protect and insulate supply chains from unplanned events that could lead to disruption. He maintains that executives and decision makers should think of these considerations as an opportunity to engage more with their supply chain and sourcing partners to protect business.

  • Engage industry-leading supply chain partners: Working with knowledgeable partners can go a long way in supply chain risk mitigation. A best-in-class supply chain partner will be able to help you navigate customs, laws, and practices that are unique to each country while also mapping an end-to-end, efficient global logistics strategy. Supply chain professionals will also have management technology in place to increase visibility and address potential delays before they slow you down.
  • Source from multiple suppliers: According to the Managing Risk in the Global Supply Chain report, 51 per cent of companies responded that, if their suppliers suffered a disaster in one location, they would be unable to continue operations in a reasonable timeframe. Once you've evaluated your supply chain, you could work with a trusted partner to develop a business continuity plan that provides alternate solutions if an unplanned event occurs. By engaging multiple suppliers within your supplier network, you can have "slack" in your supply chain, which could help with a shortage or unplanned event.
  • Take another look at your sourcing strategy: A sourcing strategy can vary based on product, company, goals, and even marketplace events; it's important to revisit your sourcing strategy regularly, as I discussed in a previous post. Take into consideration variables such as unit cost, transportation, as well as inventory safety and management, when evaluating sourcing options. For example, in the most recent UPS Change in the (Supply) Chain survey, 27 per cent of high-tech logistics executives globally said that they are currently nearshoring or plan to nearshore in the future. This figure has almost tripled from 10 per cent just three years ago. Executives recognize the benefits that nearshoring can achieve. When asked about top drivers behind their decision to nearshore, 43 per cent of those surveyed cited the diversification of manufacturing due to natural or socioeconomic risks, further highlighting the increased focus on risk mitigation when it comes to sourcing. I want to reiterate that sourcing strategies are truly unique to a product, but reviewing your strategy can provide the opportunity for timely contingency planning.

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