May 17, 2020

EY: five ways to build a resilient supply chain

Supply Chain
Sean Galea-Pace
3 min
EY: five ways to build a resilient supply chain
After featuring in Supply Chain Digital’s Top 10 Consulting Firms, we take a look at EY’s solutions and discover their tips for building a robust su...

After featuring in Supply Chain Digital’s Top 10 Consulting Firms, we take a look at EY’s solutions and discover their tips for building a robust supply chain.

Founded in 1989, EY provides advisory solutions across a diverse range of industries. The company prides itself on “helping clients solve their toughest solutions.” A member of the Big Four, alongside KPMG, PwC and Deloitte, EY believes in “building a better working world.” EY is dedicated to empowering its customers, from start-ups to Fortune 500 companies. The firm offers four service lines: Assurance, Advisory, Tax and Transaction Advisory Services. EY enables its clients to capitalise and make the most of every opportunity. EY helps firms to meet regulatory requirements, keep investors informed and meet stakeholder needs.

EY’s supply chain solutions

EY addresses organisations end-to-end supply chain and operations strategy to grow, optimise and protect operations. In its latest report “COVID-19: how to build supply chains resilient to disruption”, looked at how companies' supply chains have been impacted by the coronavirus. EY provided advice to companies on how to build a more resilient supply chain.

  1. Conduct end-to-end supply chain risk assessments and prioritise important focus areas

Responsiveness and speed are fundamental. Proactively engage with supply chain ecosystem partners, like suppliers and logistics service providers (LSP) to conduct a risk check. 

Identify - Changing demand and inventory levels in order to work out critical gaps in supply, production capacity, warehousing and transportation. 

Define - Work out common goals and an actionable short-term and outcome-driven resilience strategy with breakdown activities among the supply chain ecosystem. 

Deploy - Leading companies create action plans based on scenario analysis to decrease the impact of disasters. A fact-based dashboard, which includes key KPIs help build enterprise-wide ecosystem visibility.

  1. Develop a robust risk management process and diversify supplier network

Enterprises should work out supply chain networks from end consumers to tier-N suppliers. Companies should develop a methodology to measure risk for each supply chain node, warehouse, factory, supplier or transportation node.

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  1. Implement digital and automated manufacturing 

Introduce a strong manufacturing excellence programme to mitigate reliance on labour intensive processes. This will enable standardisation of daily work and job aids, decreasing the pressure of relying on individuals to make an operation perform through digital technology. IoT capabilities can help integrate a digital ecosystem of connected systems that provides users with relevant and updated data to make the most informed decision at all times.

  1. Evaluate and adjust procurement category strategic responsibilities

Transform procurement into a value generation function through timely reviews and adjust category strategic priorities to establish new business relationships with suppliers to align to a company’s overall supply chain objective. Organisations can introduce digital procurement technology to benefit from supplier social networks.

  1. Invest in more collaborative and agile planning and fulfillment capabilities 

Today’s technology can provide more agility and collaboration within the enterprise. From IoT devices for demand sensing and goods movement tracking, there is a range of solutions that are fundamental in the wake of pandemic events such as the coronavirus today. Because of the coronavirus, it is time that companies quickly assess, recover and respond quickly to mitigate supply chain disruption as much as possible.

EY’s five elements to its strategic ambition:

  1. To be the most favoured employer.

  2. To be #1 and #2 in market share in its chosen services.

  3. To have leading growth and competitive earnings.

  4. To have the best brand.

  5. To have positive and strong relationships with stakeholders.

For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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