Gartner: 6 Strategies for a More Resilient Supply Chain
Following a recent Gartner survey, 21% of respondents stated that they have a highly resilient network, which means good visibility and the agility to shift sourcing, manufacturing and distribution activities around quickly. It suggests that increasing resilience will be a priority for many as they emerge from the current crisis, with over half expected to be highly resilient within two to three years.
“Most supply chain leaders recognize that becoming more resilient is a necessity in the current environment,” said Geraint John, VP Analyst at Gartner. “However, measures such as alternative factories, dual sourcing and more generous safety stocks go against the well-versed philosophy of lean supply chains that has prevailed in recent decades.”
However, in most cases, increased resilience comes with additional costs. But, doing nothing can be significant. Here’s six major strategies supply chain leaders can pursue to build greater resilience into their networks.
1. Inventory and capacity buffers
Buffer capacity is the easiest way to increase resilience, whether in the form of underutilised production facilities or inventory in excess of safety stock requirements. The challenge is that buffers are expensive, which means that supply chain leaders have a harder time justifying it to the C-suite.
Leading companies use buffers in the form of surge capacity for new product launches or expansions into new growth areas. Companies can create buffer capacity by leveraging contract manufacturers strategically for their surge needs.
2. Manufacturing network diversification
Many companies have begun to diversify sourcing or manufacturing bases as a result of the US-China Trade War. For some, it has meant switching to new suppliers outside China or asking existing partners to supply them from elsewhere in Asia or in countries like Mexico. “Disruptions to supply chain operations have intensified in the past few years,” commented John. “This means that the cost of retaining multiple supply locations must be seen more as a cost of doing business, rather than an inefficiency."
Following major disasters in Japan and Thailand in 2011, significant disruptions were felt by supply chains across the world and showcased companies’ reliance on single sources of supply. As a result, nearly finished cars could not be shipped to customers because of the missing, and often inexpensive, components. Multisourcing is considered the most effective way to mitigate this risk.
Beyond multisourcing, some companies seek to decrease geographic dependence in their global networks and shorten cycle times for finished products. Regional or local supply chains can be more expensive, because they add more players and complexity to the ecosystem, while allowing for more control over inventory and transitioning the product closer to the end consumer.
5. Platform, product or plant harmonisation
The more regionalised the network, the more harmonised plant technology has to be to enable products to move easily throughout the network. The use of common vehicle platforms for a variety of models in the automotive industry is one well-established example of such harmonisation.
6. Ecosystem partnerships
As a result of the COVID-19 pandemic, it has outlined the necessity of having a diversified approach to sourcing. At the same time, collaboration with strategic raw material suppliers and external service partners is key to ensure greater resilience in the future. For organisations without the scale to support multiple locations on its own, strong relationships with contract manufacturers and global 3PLs can be critical to diversifying production and distribution to different countries. Gartner’s survey data shows that almost half of supply chain companies are either using external manufacturers or exploring how to support product moves, with a similar proportion engaging logistics partners for the same purpose.
The Ultimate Procurement & Supply Chain Event
From September 28th-30th, network with C-level executives, gain insight from industry pioneers and walk away with actionable insights that accelerate your career. By the end of the week, we promise you’ll have the skills to solve the world’s most pressing supply chain and procurement challenges.
The three-day show is an essential deep dive into the industry, with influential speakers sharing insights and strategies from their organisations, group roundtable discussions, and fireside chats. Whether you attend virtually or in person, you’ll strategise how to cope with global disruption, learn from industry leaders, and walk away with tips, tactics, and tangible connections.
How to Attend
In a COVID-disrupted era, we know that the majority of people would rather avoid travelling for events─why take the risk, right? In response to the continued disruption, BizClik Media Group has decided that Procurement & Supply Chain LIVE will offer the best of both worlds through hybrid accessibility.
That means you and your peers can attend the event in person or virtually ─ with no disadvantages for people who choose not to make the trip to the Tobacco Dock venue.
Procurement & Supply Chain LIVE will be held at the Tobacco Dock in London, an industry-leading venue that is renowned for delivering world-class events. For attendees’ peace of mind, the venue is working to the government-endorsed AEV All Secure Framework, alongside mia’s AIM Secure and ‘Good to Go’ accreditation, they will ensure that we achieve a COVID-secure environment to facilitate all of your networking needs.
Our physical venue is both historic and stunning, but it has no bearing on the information that you and your peers can gain from the event. You can still absorb it all, interact with other attendees, and enjoy the conference experience on your alternative, virtual platform.
The platform will feature live feeds from all of the stages, as well as virtual networking areas. So, if you want to avoid travel, it’s not a problem! You can still get involved and enjoy the entire experience from the comfort of your own home.
What’s on the agenda?
With keynote addresses from global leaders, dynamic roundtable discussions, and extensive networking opportunities, Procurement & Supply Chain 2021 will expand your network, deliver insight, and enhance your organisation’s reach.
Across the three-day event, a number of relevant topics and trends surrounding procurement and supply chain will be discussed.
- Tuesday 28 September - Digital supply chain
- Procurement strategy (11:30 am)
- Supply chain leaders forum (12:00 pm)
- Women in supply chain (14:00 pm)
- Procurement technology (14:30 pm)
- Wednesday 29 September - Procurement consulting
- Sustainability (11:30 am)
- Supply chain management (12:00 pm)
- Digitalisation (14:00 pm)
- Risk & Resilience (14:30 pm)
- Thursday 30 September - APAC sessions (04:00 am)
Influential executives from around the world will give their insights and professional experiences surrounding these topics, allowing you and your company to leave with valuable information.
The past year has shown how important supply chains are and the importance of managing them correctly. With increasing digitalisation across all industries, you won’t want to miss out on our great speakers and information surrounding this topic. Preparing your company for the future is key, and we are sure you will gain great insights at our three-day event.
Order now to make the most of our early-bird offer. Ticket prices increase over 50% soon! For tickets and information, head over to our event site.