Supply Chain Disruptions and Strategy Diversification

Supply chain disruption - if COVID, the Suez Canal blockage, war or terrorism has shown us, the delicate balance some household goods face getting to our shelves. Need some Cadieux quotes to go with this one. Microchips, Toilet paper, Neodymium, food supply, medical supplies, labor, and even oxygen. The world can no longer make and manufacture products in the same way that it was done. Organizations must become more responsible and we believe that intelligence has made this easier than ever before and reduced the need for trade-offs. We believe the move towards sustainability and intelligence will define the 5th Industrial Revolution. With digital thread capabilities that allow for the digitization of entire product and operating value chains, leaders can now find sustainable solutions that are also responsible, economical and relevant

If the past few years have shown us anything, it’s that expecting chaos must be at the forefront of supply chain preparation. From simple necessities like toilet paper to complex technological implements like semiconductors, production has been fundamentally disrupted. And although large swaths of this disruption are traceable to the COVID-19 pandemic, we have since faced the effects of a myriad of geopolitical crises. But while it may appear there are no localized solutions for you or your business, this is not the case. In this article, we’ll talk about what you can do to protect yourself from supply chain shortages and minimize negative effects on your business.

Nearly every corner of global industry has been impacted by shutdowns and slowdowns in production. Take the energy crisis in China, for example. Between attempting to stop the spread of new waves of COVID-19 and working to minimize the impact of the Russian-Ukrainian conflict, Chinese production has stalled, leading to a challenging decline. But instead of being paralyzed by this industrial torpor, it is important to use this moment to make more informed decisions. While the best thing you can do for your organizations is to invest in consulting that is specific to your particular needs, these four strategies will give you a place to start:

1. Global Sourcing

Global sourcing is one of the best ways to mitigate shortages, if for no other reason than the larger your net of potential sources, the more stopgaps you have in place in case of production difficulties. And by broadening your sources, you also will broaden your total opportunities. Global sourcing limits your company’s supply chain risks and protects your organization from these potential losses. While some procurement managers are hesitant to use global sourcing, as it is erroneously associated with a decrease in quality, the opposite is more likely to be true: growth in sourcing allows for similar growth in quality. Through strategy diversification, global sourcing enables you to improve the capacity of your organization as well as reduce costs.

2. Master Data Management

Another way to manage the instability of the global supply chain is master data management, or MDM. MDM is an organizational strategy that systematically streamlines data across any enterprise’s shared data assets to increase consistency, stewardship and accountability. One way organizations have utilized MDM is to gain insight into customer satisfaction by better compiling and assessing customer data. Another avenue for implementation is on the supply side to reduce unnecessary or duplicate parts.

3. Implementing AI

An often-overlooked strategy for supply chain management is calculated AI implementation. Now because there are a virtually unlimited amount of possibilities for AI use, it is easy to be overwhelmed by the prospect of working with AI. But strategic incorporation can help your organization in more ways than one. One way is though AI’s exceptional support of management oversight, package consolidation and factory floor management. It is important to remember: no matter how impressive AI appears, it is not a cure-all for your supply chain issues. However, it is a key component to strategy diversification.

4. Cyber Security

Although it can be easy to focus on the global sources of supply chain issues, it is also critical to maintain localized sources as well. While supply chain disruptions often stem from overseas issues, other problems much closer to home can play just as large of a role. In 2021, for example, a majority of companies were the victims of data threats or ransomware attacks. It is critical that cybersecurity functions as a critical focus for you and your organization—and not just in your IT department. Cybersecurity is a process that must be implemented in every step of supply chain management; otherwise, attackers will continue to do damage to everything from transportation to sourcing and even quality control.

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