It depends on how you manage the risk. [Or not].
Supply Chain Digital says you don’t need to be an Einstein to create more resilient supply chains. You just need these 3 things to be able to respond to uncertainty and compete with forward-thinking companies:
- Digitalization: A recent PwC survey showed that “Digital Champions,” or those companies who were furthest ahead in the digitalization of their supply chains, reported a 8% reduction in supply chain costs and a 7.7% increase in revenue for the last year.
- Diversification: Diversify supply, both in terms of company and location. This is really about building the right kind of relationships with suppliers. Specifically, look to work with suppliers who can offer collaborative partnerships. Related article: Offshoring vs. Reshoring in Supply Chain
- Collaboration: That brings us to #3, good collaboration, including Tier 1 and Tier 2 suppliers. Supply chain collaboration frees you from firefighting during a crisis period. It enables transparency and visibility across the entire value chain so that everyone is aligned on the supply chain risk mitigation strategy.
These ingredients, paired with machine learning and AI to spot relevant patterns and adopt a more proactive risk management approach, will enable businesses to emerge from this phase better prepared for the next shock to the system.
IBP: A Great Place to Start
Check out Blue Ridge Integrated Business Planning. IBP solutions strategically align the revenue, demand, supply and financial plans to:
- Establish transparency,
- Fortify supplier relationships, and
- Synchronize enterprise-wide execution
Read more about next-generation Integrated Business Planning here: