Romolo Tavani /stock.adobe.com
Professor
Wilding urges
manufacturers
to build resilience
into their
supply chains
to just deal with a central HQ of a supplier and
not know exactly what route the supplies they
need are taking.
Simply switching supplies away from China
for a period because of Covid-19 clearly isn’t the
answer, as it would merely change the risk profile.
Companies should map and continually monitor
for vulnerabilities in their supply chains in order
to anticipate risks and threats and look to widen
sourcing locations even if they involve higher unit
costs. Developing new partnerships can take time.
China’s manufacturing operations are efficient
and technologically advanced – because of local
and Western investment – and alternative regions
may not have these capabilities. One method of
increasing resilience, increasingly being used in the
apparel sector is buying a certain level of ‘capacity’
rather than individual materials or products,
the details are agreed as and when necessary.
This means industries can hold capacity across a
number of different regions and switch between
them when disruptions occur.
Manufacturers and their chains of suppliers,
wholesalers and retailers need to be talking more
often. They need to be honest about potential
problems, do their best to dispel any lingering
mistrust about capacity and supplies, talk openly
about what necessary looks like and what might be
an overreaction. The implications of stockpiling on
organisational agility need to be accounted for in
decision-making. Companies should be looking to
negotiate with suppliers and customers to develop
strategies for holding stocks across the supply
chain. Only this way will it be possible to construct
semi-certainties and some more confidence within
supply chains, and make it easier to deal with any
shocks if they come. After all, as we are witnessing,
competition is not between individual companies
but between the supply chains they are part of.
Building the Temple
Ultimately it doesn’t matter what the cause of
the barriers and uncertainty are – be it extreme
weather events or political turmoil – the same
principles apply when it comes to building a
resilient supply chain. This is what I call the
‘Temple of Supply Chain Resilience’ (pictured,
right). The foundation needs to be an effective
MARCH 2020 CORONAVIRUS
supply chain strategy: defining
the supply chain processes,
infrastructure, information
systems and supply chain
organisation (how people
within the supply chain relate).
The floor of the Temple
needs to be product design,
as risk to the supply chain is
often embedded during the
design stage for a product.
Think about the raw materials
used and where these will be
sourced from – can a design
utilise different materials such
as aluminium or steel? Can
the product be designed so it
can be configured as close as
possible to the customer? Can
different products be configured
according to different needs?
The walls of the Temple
are made of four pillars: agility
(to ensure flexibility within
the supply chain operations);
collaboration, both internally
and externally (the more you
collaborate, the greater the
resilience you can achieve);
risk management culture (so
when people make any decision
they ask one simple question:
“How will this impact on
the overall risk profile of my
supply chain?”); and supply
chain design (the locations
and network you use, and the
equipment you use – a forklift
truck on lease may seem a
good idea, but where are the
spares sourced from?).
The roof of the Temple
is supply chain transparency.
There need to be high levels
of transparency across product
flows and network, to reassure
everyone involved that the
supply chain is operating
effectively via connected
information systems and good
communication. Even simple
paper-based supply chain
maps are useful for making
sure all members have a clear
understanding of the entire
supply chain.
The crown consists of
continuous monitoring and
intelligence: making sure your
employees, suppliers and
customers have ways of keeping
you informed of issues so you
can act quickly – hopefully
before your competitors – so
you can secure the resources
you need to keep your supply
chain operational, whatever
the changing conditions from
an unpredictable political
environment might be.
The coronavirus outbreak
will come under control, but
the next serious disruption to
supply chains is just around
the corner. The way forward is
for manufacturers to build up
resilience across entire supply
networks during the good times,
talking and sharing to create
collaboration, transparency and
trust, which will be invaluable
through the hard times.
CONTINUOUS
MONITORING
SUPPLY CHAIN
TRANSPARENCY
COLLABORATION
RISK MANAGEMENT
PRODUCT DESIGN
AGILITY
SUPPLY CHAIN DESIGN
SUPPLY CHAIN STRATEGY
www.manufacturingmanagement.co.uk 35
/stock.adobe.com
/www.manufacturingmanagement.co.uk