How to Make Supply Chain More Resilient and Deliver Better ROI

A supply chain isn’t working when the costs are getting out of control, the inventory levels and costs are not in line with the market, and consumers aren’t happy. But most supply chains are so complex that it’s difficult to pinpoint what needs to be fixed.

An effective supply chain is crucial to business success. As recent economic turmoil and various natural disasters have shown, you need to think strategically about where your products are made and how they will be delivered. You need to understand all possible risks to your supply chain – and what you’ll do if a significant event disrupts current operations.

To make the supply chain more resilient, businesses need to evaluate products from start to finish – from origin to production, storage, and transportation. The evaluation needs to involve essential business units, suppliers, and customers. It’s important to understand what’s most valuable to each stakeholder, then adapt current procurement and supply chain processes to meet these needs. 

Assessing Vulnerabilities

To enhance supply chain resilience, it is crucial to identify the weak points within your supply chain. Conduct a comprehensive analysis of your supply chain processes, from sourcing raw materials to final product delivery. Look for areas where bottlenecks or dependencies exist, such as single-source suppliers, limited transportation routes, or critical components with limited availability. By pinpointing these weak points, you can proactively address vulnerabilities and develop strategies to mitigate potential disruptions.

Consider the Impact

• Are category, procurement, and supply chain management strategies aligned with the overall business objectives?

• Are the activities involved in procurement and supply chain cost-effective and aligned with best practices in (and outside of) the industry?

• Do you know what your customers value most about your products and services? Do your procurement and supply chain practices enable these values?

• How do you measure the success of your procurement and supply chain?

• How are you incorporating sustainability into your procurement decisions and supply chain? Do your processes meet current and projected future environmental regulations?

Answering these questions will help you find a place to start in optimizing your supply chain.