Guide to Building a More Resilient Supply Chain

Brief

Increasing resilience has been a strategic priority for many shippers as they recover and apply lessons learned from global disruptions caused by the COVID-19 pandemic. Resiliency continues to be in the spotlight as disruptions from global conflicts, climate impacts, and many more sources continue to challenge supply chains.

This guide focuses on some key investments and focus areas that shippers should consider to improve global supply chain resiliency.

In a Deloitte global survey of supply chain executives, nearly 80% said their organizations have experienced an adverse supply chain event within the last 12 months. And less than 22% said they strongly agree that their supply chain functions have proven to be resilient against those external shocks.¹

This guide focuses on some key investments and focus areas that shippers should consider to improve global supply chain resiliency.

You will learn:

• Why Resiliency is a top priority
• How to build a more resilient supply chain
• 5 elements of effective logistics contingency plans
• Resiliency vs. lean: How to find the right balance
• 5 barriers to resilient supply chains

Why resiliency is a top priority

Disruptions have always been a part of supply chains, so what’s making shippers prioritize resiliency now?

Increased globalization and complexity:Global commerce is rapidly adding complexity to the supply chain and magnifying the impact of disruptions. Evolving regulations, climate events, and geopolitical tension that used to be isolated to a region can have far-reaching consequences on many supply chains, especially those that are lean and global.

Sustainability commitments: Supply chains are under more pressure to reduce their environmental impact than ever. Constant disruptions can steer supply chains off course from their sustainability goals as leaders devote more attention and resources to mitigation. According to Gartner research, nearly two-thirds of companies regularly deprioritize sustainability for resilience.²

Focus on customer experience: Supply chain execution, or lack thereof, plays a key role in the customer experience. Customers depend on greater speed, visibility, quality, and consistency. A resilient supply chain helps companies be responsive to customer needs and maintain high service levels, while also keeping net working capital and costs under control.  

Exponential growth of data: There is more data today across supply chains than ever before. By capturing this information in an efficient and accurate way, shippers can harness data to build predictive models and make informed decisions to improve resiliency throughout the supply chain. 

How to build a more resilient supply chain

Companies looking to create resiliency in their supply chains are implementing new sourcing strategies, regionalizing supply networks, digitizing supply chains, and more. Before the next disruption strikes, there are steps and investments you can make to protect your bottom line and become more agile and responsive. Start by prioritizing these key areas:

Invest in technology and digital capabilities

Technology that provides centralized supply chain visibility, automation, and predictive analytics on a global scale is a key capability to achieving resiliency. Companies that have these capabilities may still get disrupted, but their ability to see and react to changes faster lessens the impact and leads to faster recoveries.

To improve resiliency and agility, shippers should specifically look for tools that provide the following:

1. Real-time visibility
• See your supply chain globally visualized, including all inventory at rest or in motion, across all modes and regions.
• Proactively track, monitor, and react to disruptions before they occur through integrations from external data sources like weather, traffic, and current events.
2. Artificial general intelligence, predictive analytics, and machine learning
• Turn data from various sources into business intelligence that reveals actionable insights, improves decision-making, and automates tasks.
• Spot shipments that are trending toward committed delivery dates and recognize which ones are at risk for late delivery.
3. Risk analysis
• Connect historical disaster effects with supply chain data to identify and analyze risk metrics for site locations, routes, suppliers, and loads.
• Reduce over reliance on carriers and ports with the highest risk profiles to minimize service level disruptions.
4. Control Tower^® connectivity
• Streamline communication and connectivity across logistics providers, and improve performance through Control Tower networks, connected by a single technology platform.
5. Internet of Things (IoT) integrations
• Take monitoring and tracking to the next level with IoT devices that can measure and monitor elements in your shipments like shock, light, and temperature.
• Monitor and be alerted to potential spoilage, damages, or tampering, with the goal of mitigating and recovering from the issue immediately.

Update your risk management plans

An effective risk management plan should include:

Supplier awareness: Identify the relative strength of your core suppliers. Keep your senior management aware of potential risks, since these vulnerabilities can have an impact on decisions regarding where to source, manufacture, and market products. Most supply chain disruptions occur upstream so it’s important to gain visibility to your suppliers’ suppliers and where components are coming from. Mapping your suppliers and their key suppliers is a powerful activity to bottlenecks and points of failure risks.  

Scenario planning: Prepare for future disruptions with scenario planning activities to simulate network disruptions. From there you can develop contingency plans, understand disruption costs, and ensure all parties understand their areas of accountability. Spell out the responsibilities of regional offices and third-party providers. Developing and promoting a plan will contribute to vendor selection criteria—and help all parties understand the expectations for communication and response. 

Scorecards: Evaluate both in-house and contracted supply chain providers through scorecarding. The scorecards will help everyone understand which capabilities and responsibilities are most critical. Scorecards should balance risk mitigation, contract, and response capabilities.

Quarterly reviews: Suppliers and in-house operations should be reviewed quarterly for their handling of incidents to promote proactive risk monitoring. Data collected before and during these reviews will likely contribute to the strengthening of future risk management planning.

Digital twin mapping:  A visual map of all transportation routes, with identified risks called out as “hot spots,” promotes a greater understanding and assessment of risk. By monitoring weather events, political unrest, and other elements of risk and visually displaying them on a global map, shippers can develop highly effective prevention and response plans.

Secure global talent

While technology investments remain a top priority, people will always be an important part of supply chains. Technology has the greatest value when the people operating it understand all its intricate details and systems.

The shortage of supply chain talent has been a key issue within the industry for some time, and it can be challenging for companies to find and retain these in-demand experts. When you choose a TMS provider that offers managed services, you can rely on them for the people-plus-technology approach, so you gain instant access to consistent supply chain talent who act as an extension of your team. As a result, you tap into the technical and strategic knowledge required to unlock the true potential of the TMS and maintain a reliable, steady team of resources.

Resiliency vs. lean: How to find the right balance

Supply chains today are being tasked with becoming more global, complex, and multi-channel while also being pressured to reduce resources and spend. But when it comes to supply chain efficiencies, how lean is too lean?

As well-known brands have suffered through very public service disruptions in recent years, that question has gained renewed attention in corporate boardrooms. Complete redundancy is cost-prohibitive, but some redundant stock, systems, and resources can help avoid the waste of system breakdown if a disaster occurs, even in a highly efficient supply chain.

Here are ways a global TMS can help address competing priorities of achieving lean cost savings, while also delivering high customer satisfaction through supply chain resiliency.

Cost management: Achieve savings through optimizations and automation around procurement, audit/pay accuracy, fine reduction, and more. Power users maximize the benefits of the technology, reducing the need to add and train headcount. In addition, shippers can take advantage of the industry expertise offered by providers of managed services who are well versed in risk management and contingency planning. 

Visibility and business intelligence: A panoramic view of your entire supply chain with details for every shipment worldwide brings new agility, accuracy, and insight to critical transportation and logistics decisions. Platforms that have integration with real-time data feeds—including weather, traffic, socio-economic disruptions, and other factors—help optimize decision modeling, risk analysis, and other critical supply chain processes. 

Demand forecast planning: Better understand demand patterns by seeing a clearer picture of freight flows at local, regional, and global levels, leading to improved workforce planning at your sites and collaborative shipment planning with material vendors. This can also make it possible to respond immediately to marketplace changes or disruptions—including sudden spikes in demand. 

Invest in resiliency today for a competitive advantage tomorrow 

When it comes to finding the right level of visibility to your supply chain risks, TMC, a division of C.H. Robinson can help. With supply chain risk analytics and assessment services through TMC, you can gain visibility to and measurement of supply chain risk factors, develop risk mitigation plans, and monitor and review response effectiveness.

By bringing together our experienced supply chain engineering team, global technology, and information advantage, you can mitigate risks, minimize costs, and improve resiliency. Connect with an expert to get started.

Footnotes

1. Deloitte Insights, “2023 Deloitte Global Supply Chain Executive Trust Survey,” July 13, 2023.
2. Gartner Research, “Supply Chain Executive Report: Balancing Sustainability and Resilience for Our Climate Future,” July 26, 2023.
3. Gartner Research, “Future of Supply Chain: Crisis Shapes the Profession,” December 2020.