Building a reliable future in an unreliable world
If the events of the past half decade have taught businesses around the world anything, it is that nothing is ever certain. The need to strive to maintain continuity against a backdrop of global turmoil has dominated the agenda. Global supply chains have felt pressure from the pandemic, geopolitical machinations, raw material shortages and market forces dictating a change in spending habits.
Those with a rigid supply chain structure found themselves struggling to respond to the unique challenges of the pandemic era. Those operating close to the line, reliant on seamless supply and consistent alignment, were brought to their knees when raw material shortages broke a key link in the chain. Even growing regulatory challenges have highlighted the importance of creating clarity and compliance from end to end. The world must emerge from this road having learned from its past.
A new approach to supply chain management
The reasons for, and results of, recent disruption make it clear that brittle and closed supply chain structures do not align with stakeholder needs. All manufacturers must be supple, smart, and efficient in the way they approach supply chain management, with their eyes open to changes in the market and the flexibility and capacity to maintain smooth operation despite challenges to the status quo.
Investment in the three ‘R’s – Resiliency, Robustness and Responsibility – has become critically important. Resiliency in business is those that can create a shield which offers them protection when times are tough. Robustness acknowledges that, sometimes, that shield will be breached – robust businesses plan, with their partners, to ensure that they can react quickly to unforeseen changes in the market. Responsibility means firmly establishing an end-to-end culture of quality, trust, and an understanding of the place that businesses have in the world.
Revealing strengths and weaknesses
It really does not matter how large or small a business is, how prominent its place in the market, or how comfortable and secure it feels in its relationships with suppliers. Every business can find potential improvements if they take the time and resource to look. Those seeking to reset and refactor their supply and value chains must carefully audit the practices and processes which enable those chains to function, taking stock of their successes and most importantly, failures.
Regular, comprehensive audits are a key step in taking a proactive approach to supplier management. It is not enough to monitor the position of direct suppliers. These analyses must reach throughout the chain, to discover potential weaknesses in secondary suppliers. They must reach materials markets, helping to predict potential shortages and inform decisions to overcome difficult market conditions. They must go as far as governmental and regulatory changes, to ensure all within the supply chain are fully in line with a responsible structure.
Guarding against the unknown
No amount of analysis will predict the unpredictable – and sometimes, as we have become well aware, natural disasters conspire to disrupt suppliers’ ability to produce or ship stock. International conflict is a similar disruptor, with an increasingly fractured geopolitical landscape affecting suppliers’ abilities to operate across international borders, sometimes without notice.
Building a robust and resilient supply chain means creating safeguards. Manufacturers should look to source critical components from multiple suppliers to ensure continuity if one source is unable to fulfil its obligations. Properly coordinating suppliers also helps with load balancing, as one supplier may be able to oversupply if it has a surplus while another is suffering shortages. Creating a buffer of stock is equally important, whether this is within suppliers or in-house, to maintain a flow of supply and deal with sudden spikes in industry and consumer demand.
The importance of communication
For any of these changes to happen, businesses must treat their suppliers as partners. Settling into a comfortable working arrangement is the route to complacency – relationships with suppliers must be maintained and regularly improved to ensure that all involved are on the responsibility track. All parties must know what the other is doing, and supply partners should be involved in discussions surrounding production, sourcing, and manufacturing.
Open dialogue leads to proactive improvement. Through clarity, manufacturers can help align their customers’ planning processes, and in turn customers can offer the predictability which allows manufacturers to efficiently meet their targets. Clear communication can help in the development of supply support systems, helping to address potential issues without conflict – and as businesses strive to act responsibly, it is vital to monitor all parties’ progress toward those goals in an open and honest manner.
In the end, communication, proactivity, and clever supplier management are the tools that help make the three ‘R’s a reality. A united, collaborative supply chain is one which works towards a smarter, safer world – whatever the world might have in store.
By Linn Storäng
Linn Storäng is Regional Director Northern Europe, Axis Communications. Linn is a strategic thinker who likes to be very closely involved with business and operations processes, leading by example and striving to empower colleagues with her positivity and passion for innovation. Axis enables a smarter and safer world by creating solutions for improving security and business performance. As a network technology company and industry leader, Axis offers solutions in video surveillance, access control, intercom, and audio systems. They are enhanced by intelligent analytics applications and supported by high-quality training. Axis has around 4,000 dedicated employees in over 50 countries and collaborates with technology and system integration partners worldwide to deliver customer solutions. Axis was founded in 1984, and the headquarters are in Lund, Sweden.