Globalization has, in many ways, made the world a bit smaller; from electronics to coffee, many of the goods and services we use every day have had an international journey. Corporations around the world are critically dependent on a global supply chain to respond to the on-demand expectations of today’s consumers. A myriad of factors, however - from natural disasters to uncertain political climates - could disrupt supply chains and distribution networks, causing delays and increasing costs.
Just as adults should regularly see a physician for health checks, a supply chain also needs periodic “health check-ups” to ensure continuity and minimize disruption to a business and its bottom line.
Utilizing data-driven insights and technology, strategic companies should implement these four steps to maintain a healthy supply chain:
1. Implement Supplier Diversity
Supply chain disruption is a matter of when, not if. Working with a diverse range of suppliers from various geographies can help protect companies against the unexpected, such as border disruption, natural disasters, political unrest, and regional sanctions.
Supplier diversity in terms of the types of businesses you work with – from minority-owned to veteran-owned businesses – also makes good business sense as these suppliers tend to be smaller and more agile, qualities that can often lead to innovation. Working with diverse suppliers can also help businesses comply with various corporate, federal, and state requirements.
2. Enhance Supply Chain Visibility
In order to build and sustain reliable supplier relationships, you need broad and deep visibility into your company’s supply base. That visibility enables you to determine exactly who comprises the multiple layers of your supply chain – including parent companies, subsidiaries, and their ties to other organizations, to know who you’re doing business with. Using analytics and a data-driven strategy, enabled by technology, can reveal savings, untapped opportunities, and unforeseen risks. By vetting suppliers up front, you can identify things like supply availability, lead times, and financial and operational risks, as well as avoid doing business with violators.
3. Improve Supplier Onboarding
Onboarding suppliers can be a complex process, requiring you to validate everything from whether the supplier is a legitimate legal entity with the proper tax and legal codes, to ensuring that the supplier is financially solvent. Validating vendors early in the process will increase efficiency, maintain operations, and lower costs. Having an efficient vetting and onboarding process helps companies pivot more easily during geopolitical uncertainty. Leveraging technology to streamline that workflow is one way to assure companies are able to support corporate guidelines for approving new suppliers.
4. Constant Supply Chain Monitoring
It is important to monitor your suppliers on an ongoing basis. Monitoring suppliers regularly will help prevent financial waste, production shortfalls, and inventory excesses, while ensuring supply chain continuity, centralizing risk, and being proactive with your supplier relationships. Developing a corporate supplier program that supports ongoing health scans involves putting the right technology in place to act on the above methods and enable continued monitoring. Taking advantage of advanced supply chain analytics will enable businesses to set corporate guidelines within the system to ensure ongoing health, and gain visibility into supplier coverage by industry, such as oil and gas, and by geographical location.