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About the Author

Stephanie Miles
Senior Vice President, Commercial Services
Amber Road


As Senior Vice President of Commercial Services, Stephanie Miles leads Amber Road's professional services and support teams for the delivery, implementation and ongoing support services for the company's global trade management solutions.

Prior to joining Amber Road, Stephanie ran the supply chain visibility company, BridgePoint, for 7 years as a first tier subsidiary of CSX. While at BridgePoint, she held the positions of Senior Vice President and General Manager, and also served as a Board Member. Stephanie entered the supply chain management industry in 1992, where she held numerous positions including product and project management, and Manager of Government Programs.

For more information, please visit www.amberroad.com.


Supply Chain Comment

By Stephanie Miles, Senior Vice President, Commercial Services, Amber Road

July 18 , 2013



The Four Elements of a Resilient Supply Chain

Minimizing the Impact of Risk from a Catastrophic Event, either Natural or Man-Made Within the Supply Chain



Having a resilient supply chain can mitigate the risk of a catastrophic event, either natural or man-made. A quality and timely reaction can save a company’s operations whereas a delayed and partial response can cause great financial and market expense.  While events such as the 2011 Tohuku earthquake affected companies around the globe, there are other day-to-day events that can equally derail a company’s customer service and bottom line. Price volatility for raw materials and fuel, supplier and carrier capacity not meeting demand, and fear of the unforeseen tragedies are all events that can keep an executive up at night. Below are four key elements of a resilient supply chain to minimize the impact of surprises.  

Miles Says:

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All companies are susceptible to risk – the difference is the ability to react quickly, effectively and decisively when problems do occur.
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1. Visibility


The first requirement for a resilient supply chain is visibility into supply orders and where they are located. Do you have alternate suppliers? What is their available capacity? Do you have a single point of failure if something disrupts the supplier or region? Does your distribution model include more than one transportation provider, mode of transportation and trade lane route? Which customers would be impacted by a disruption from this source? What would the impact be? Real time alerts and the ability to act on those alerts make the difference between minimizing a disruption and letting a supply chain disruption minimize your customer satisfaction and profitability. The first step in pro-active notification is connectivity and visibility with origin suppliers and operations.

Using visibility technology during disruptions allows you to manage critical supply chain issues and expedite resolution through automated notifications; increase visibility of inventory in-transit for internal and external customers who may be aware and concerned about the issue; and make accurate decisions relating to diverting inventory or resolving bottlenecks.

But it doesn’t end there. Companies need to establish processes to interpret and act on the data. 



2. Planning and measurement


The second element of a resilient supply chain is the ability to quickly compare what is happening with the disruption to the original plan. To do that requires a well-documented supply chain plan, including contingency operations, so that issues can be highlighted, measured, and compared in a concrete, meaningful way. Successfully resilient companies are able to assess situations as events occur. Without immediate action, a company may find itself unable to act on its plan should it be enacted too late, or the results might be poor. Part of accurate planning and measurement includes knowing the impact of the event on customers and partners. With accurate information companies can also rank the severity of the problem and address each situation according to its importance as well as have action plans tailored to the type and level of risk.


A centralized technology approach allows you to access one aggregated, real-time source of the end-to-end supply chain – a single source of truth. It also allows you to more easily share operational data and metrics across compliance, logistics, customer service, finance and procurement domains to move beyond tactical decision making to continuous improvement programs.



3. Sourcing and supplier measurement

A key part of a risk mitigation strategy is having alternatives in place should something go wrong. Some alternatives to consider include suppliers, transportation providers, modes of transport and trade lanes. Supply chain risks are significantly higher when a mode relies on a single business partner, region, or selection (mode, trade lane, etc).  When determining what other options are available there are tradeoffs a company needs to consider, including quality, total landed cost, country concerns, transportation network reliability, and infrastructure. In many cases you may need to develop and secure relationships so that you will be a preferred customer in times of crisis.

Trade planning technology can give you an “apples to apples” comparison of sourcing options. Such a solution should provide graphical comparisons of international shipping options based on landed cost and export and import regulations, to and from multiple locations – in other words, full visibility into all associated costs and regulations. With this information you can study different potential scenarios as well as analyze sourcing and distribution options.


Sometimes there is only a sole source supplier, which often exits when a company is dependent upon a unique product or process for its competitive advantage, or service where only one mode of transportation or carrier is available. In these cases, both you and your supplier need to make an extra commitment to prevent supply chain failure. Include risk management in your discussions of development of your relationship/product and incorporate these strategies into your service level agreements. You or your supplier may need to create an alternate facility in a new location or stock inventory in a different country as part of your resiliency strategy.



4. Timely execution


Tying these pieces all together is collaborative execution using an exception-based management process. The collaborative framework must already exist so decision-making can be quickly and systematically done. A scalable, established framework means individuals can work on mitigating issues quickly.


Final Thoughts


The ability to successfully react in a crisis is a key differentiator. All companies are susceptible to risk – the difference is the ability to react quickly, effectively and decisively when problems do occur. Incorporating these four pieces into a risk mitigation strategy provides the basis to creating a resilient supply chain.

 


Agree or Disagree with Our Expert's Perspective? Let Us Know Your Thoughts at the Feedback section below.

Recent Feedback

Thank you, all excellent points and observations.

Yes, sooner or later Murphy's law will get there first and your supply chain will break.  The four elements of visibility, planning and measurement, sourcing and supplier measurement and timely execution are all elements every SCRM program needs to address.  Having said that, I suggest all of those four elements are not created equal.  Planning and measurement would seem to be the long pole in the ISO28002 PDCA tent (followed by timely execution as a close second). Additionally, consideration for a firm's competitive advantage stratgey, be it cost-leadership, response, or differentiation, is also a cornerstone of any resilient SCRM process. But that is the subject for another day. Thank you again for your engaging and informed perspective.


John P. Bowler
Owner/Founder
Bowler Hunt, LLC
Jul, 18 2013

I enjoyed reading Ms. Miles' article about The Four Elements of a Resilient Supply Chain.   The strategy is straightforward and should be effective.   We will incorporate the template in our company's supply chain management strategy. 

Thank you for sharing this article with us.


Kimsan Chan
Corporate Purchasing Manager
Northwest Pipe Company
Jul, 23 2013

This analysis is quite elegent. Consolidation of these four suggesting strategies will give very productive results in terms of risk minimization.


Sheryl Roger
The Four Elements of a Resilient Supply Chain
http://www.thefas-solutions.com/
Apr, 20 2015
 
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