THOUGHT LEADERSHIP: TOM CRAIG
Supply Chain Resilience: Thinking business continuity Supply Chain management is central to business continuity. The pandemic has validated its strategic importance and criticality, writes Tom Craig President LTD Management, Pennsylvania, USA, a leading authority and professional consultant on logistics and supply chain management and regular contributor to Global Supply Chain.
T
he Covid-19 pandemic has presented two shocks. The first was the supply shock as manufacturers, suppliers and exporters shut down. Then was the demand shock as buyers and importers locked down or had curtailed operations. The totality was global supply chain chaos and disruption. Supply chain management is about the end-to-end movement and handling of inventory—finished goods, products, parts, components, and assemblies. That is what supply chain resilience must be built on. As you build supply chain resilience, you decrease supply chain risk. Please note that creating resilience is not an overnight project. Not by any stretch of a buzzword. There are two key parts to the achieving resilience endeavor. These two parts are not separate and distinct. They overlap.
Part 1: Call this the product side of your resilience effort with all its nodes, links, and contact points. The first step is to understand your endto-end supply chain. If you do not do this, then your efforts can be hit and miss. There are two sections to it—upstream where suppliers are and where supply chains begin and downstream which is the more recognized area. Start your assessment upstream—the inbound supply chain—where the supply of supply chains begins, has the greatest complexity and size. There are many stakeholders and players upstream. All this 58 OCTOBER 2020
means upstream is at great risk—and hence your need for resilience. Look at it in terms of its components: • Transportation and logistics • Suppliers • Products Transportation, logistic, warehouses— both yours and those of outsider providers—are your supply chain infrastructure. They are an integral part of what the supply chain does. Think of this as bills of materials, products and their components. You want to identify and prioritize. Rank critical products—and their components/ assemblies. Determine key suppliers. Select the must-have transportation and logistics service providers. That means looking at suppliers’ suppliers, their logistics, transportation, forwarders, and ports. If your supplier network and their network has problems, then you have problems. Risk flows down. Map your upstream supply chain and the supply chains within supply chains. Look for gaps, missing step/players, and weak links. That may be the critical items you started with or revised ones based on your analysis. The mapping can identify new risks, such as suppliers or suppliers of suppliers for multiple or key products or components. Minor ports or small transport or logistics providers could be problems. Not everything is done by large, MNC provider corporations who are not immune from problems either. Another point in the assessment is the chain of custody. You want to see the flow
of products. Who does what, where, and how? Gaps in the custody can be red flags for your analysis. The downstream supply chain is built around your company facilities—factories and/or warehouses / distribution centres. With the analysis of the upstream and downstream supply chain segments come hard questions about what your suppliers, service providers, and their suppliers and providers and respective approach for resilience. You may face decisions on changing some of these. Remember, increased resilience means reduced risk.
Part 2: This is about technology. Here come technology and its current silver bullet resilience status. Think of TV commercials and you hear—contactless. It makes it harder to spread coronavirus. Implicit in it too is that technology is contactless and will not be impacted by a pandemic. It will not become ill.
