When is the Supply Chain resilient?

I wish to share some observations I made after reading an article published by Inbound Logistics (www.inboundlogistics.com) that draw my attention in August, and tackles and issue that now – in light of the dramatic earthquake that has recently hit Italy – has become very topical.

Major supply chain disruptions are commonly referred to as “Black Swan” events. A “Black Swan” is an unpredictable or unexpected event, usually with extreme consequences. It is a high-impact, low-likelihood geo-political occurrence that consequently is also difficult to manage. In these instances, knowing exactly where your product is in the supply chain is extremely important.

The effects of a hurricane, flood, fluctuating oil prices, political unrest, and border closures can be mitigated by enhancing supply chain visibility with industry standards that enable a more fluid and communicative business environment, and the use of a common language to identify, capture and share products, location data and information in real time. Standards enable supply chain visibility, which is a valuable asset when an unexpected event occurs, and make the Supply Chain more resilient in case of occurrences of any kind.

Visibility and nimbleness: two key words

The article contains some interesting data.

Seventy percent of small and mid-sized businesses that responded to a survey conducted by the Business Continuity Institute and promoted by Zurich revealed that they have no visibility over their entire supply chain. Moreover, seventy-four percent of companies worldwide suffered a supplier-related disruption in the past year, whilst fourteen percent experienced losses of over 1 million Euros as a result of their lack of visibility.

Lack of visibility causes stress for the entire supply chain – manufacturers, suppliers, brand owners, resellers and retailers, – with a negative impact on customer experience.

Within the context of a crisis situation, this effect is further intensified. A flexible system based on common rules, open and consequently dynamic, enables sharing or, more precisely, ensures knowledge.

Hence, Black Swan events can be tackled, shared and overcome. Conversely, a closed system inevitably leads to a quick “reshuffling of the same old cards” in an attempt to find alternative plans.

The adoption of standards to enhance visibility helps create a nimble supply chain that expands a company’s capabilities to meet the needs of today’s multi-channel consumers, and adapt to a rapidly changing business environment driven by the growth of e-commerce.

A company that leverages the interoperability of standards – as opposed to siloed systems – to identify, capture, and share information about a product, benefits from overall operational efficiency and real-time visibility, and is provided with the speed and accuracy required when they are needed most, which helps it to manage risk during normal operations and at times of crisis.

I share the view that today it is essential for supply chain management teams to focus on the need for nimble solutions that enable the creation of resilient supply chains, which are not only an effective risk management tool, but also an invaluable asset in every moment.

Our mission is to provide our clients with the best tools and assist them in their planning activity, enabling them to organise a resilient Supply Chain.

For this reason, at Mobiix we attach great importance to sharing information, adopting industry standards and achieving the standardisation of a process that goes by the claim “Make it easy”. Our apps and solutions are designed with the aim of providing the greatest operational efficiency possible through visibility over the entire supply chain, the sharing of knowledge, and the implementation of technologies that facilitate the process.

 

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