A good supply chain strategy is a winning strategy!

In the environment where the world is changing faster than ever, and when businesses are expected to react swiftly to regulations and government guidelines, a good supply chain strategy incorporating technologies and innovation which improves the company’s business agility is a winning factor.
 
We have put together some key considerations for your company’s resilient supply chain.

1. Identify risk identifiers and assess them holistically.

On a global scale, most risks are interconnected. A severe weather event can cause an industry-wide shortage of raw materials, or a geopolitical event can take place which forces companies to switch suppliers on short notice. It is important for businesses to analyse their main risk identifiers and keep track of the latest updates under these topics.

Some suggestions of risk identifiers that you should consider:

• Geopolitical news – e.g. trade wars or limitations on trade 
• Severe weather
• Industry association news – e.g. industry outlook, labour-related news, industry growth / decline 
• Inventory levels at your key suppliers

2. Assess all information available and strategize risk mitigation options.

With your risk identifiers ready, you can proceed on to think of ways to mitigate the risks.

Both short and long-term mitigation methods are critical – some examples are:

• Short-term mitigation: Setting up a minimum stock level, strengthening supplier’s contract, following your supplier’s mitigation plans, redesigning product to accommodate alternatives.
• Long-term mitigation: Increasing inventory, ownership of supplier’s company (for better control) or developing other sources (for example, in-house production).  

3. Set up automatic controls and alerts in your operational processes.

It can be complicated to manage your inventory and supply chain efficiently – not only do different parts have varying lead times and pricelists according to suppliers, but if your process also involves assembly or manufacturing planning, it can add another level of complexity as some parts will be needed in the earlier stages while other parts can be added later without impacting overall production.

To help simplify these processes, we recommend using an integrated ERP system. An ERP system will allow your staff to track stock levels clearly, such as the quantities of available / reserved / incoming inventory, stock levels across warehouses, set up alerts upon hitting minimum stock level, and more.

An effective ERP system should also provide an inventory forecasting function enabling your teams to easily predict and forecast inventory levels based on a combination of confirmed orders, potential orders and historical data trends for better decision-making. 

4. Identify your decision team and encourage employees to provide suggestions.

Your ground level employees are exposed to the daily ins and outs of the business and thus can have valuable insights or input regarding the day-to-day business operations. Despite this, it can be difficult for them to raise their concerns if they feel uncertain that their input will be welcomed.

To prevent such situations, the management can clarify the role of the decision team (which is to assess the situation comprehensively and make decisions), followed by encouraging employees to share their insights with the decision-making team and present this as a learning process for the company. 

5. Fully coordinate with your supply chain stakeholders. 

At every stage of your supply chain (including your suppliers), each department should understand the situations which will require their immediate action. This is to prevent decision paralysis during critical moments. 

Here are some examples:  

• Part shortages – The relevant teams should be Procurement, Engineering Design and Operations.
• Product flow disruptions – Logistics and Procurement.
• Distribution delays – Operations, Sales and Procurement (if alternative suppliers are required). 

We recommend that each team have a clear understanding of their role and their relevant contact persons, as well as the series of follow-up actions to take in any potential scenario. 

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An effective supply chain strategy does not stop at inventory management – it should also consider other business processes such as production and project management.

To hear more information about supply chain management and get a sneak peek into a live ERP system demo, join us at our upcoming webinar on 13th October (Wed), 2 – 3pm!

Click here to register for our complimentary webinar. 

If you would like to explore our PSG packages or other services, do contact our team for a no-obligations discussion.