Top 4 Ways To Improve Supply Chain Resilience in 2024

For the past two years, the global supply chain industry has been on a roller coaster ride. As the strain of the pandemic eases, new challenges are emerging, causing companies to rethink and reshape their strategies.

Moving forward, one of the main focuses of supply chain leaders will be to work towards a more resilient and flexible supply chain that can survive a volatile environment.

This article explores 4 ways to improve supply chain resilience to overcome current and future market challenges.

Improve data sharing

Sharing information with your vertical supply chain partners is an effective way of enhancing supply chain visibility. This can reduce uncertainty in the supply chain and streamline the flow of goods, both up and downstream.

Strengthen supplier relationships

Information sharing is not possible without strong supplier relationships. Organizations can strengthen relationships with their supplier and other trading partners by creating a mutual understanding, improving internal operations, and improving sustainability. 

Check out our comprehensive article on how to improve supplier relationship management (SRM) to learn more.

Utilize an integrated software

Through a supply chain business network software, all trading partners across the vertical and horizontal supply chain can be connected. Information such as shipment details and inventory levels can be shared for better supply planning.

You can also use our data-driven list of no-code supply chain software to compare the top vendors and find the right fit for your business.

Rethink sourcing

During the pandemic, one of the reasons which caused many supply chains to collapse was the extensive reliance on cheap off-shore manufacturers. A small delay at the manufacturer’s end resulted in major delays and disruptions down the supply chain, and the lack of physical connection with the suppliers made the situation even worse. 

As freight costs and shipment times increase, supply chain managers rethink their sourcing operations.

Bring the supply closer

Reducing the dependency on off-shore manufacturers is a good way to improve resiliency. Supply chain managers should either switch to in-home production or contact on-shore suppliers. 

For instance, Ford is creating a new on-shore manufacturing facility to get more control over its electric car battery supply.

Redesign the products

Another way is to redesign products to eliminate the need for vulnerable sources of parts. General Electric recently did that to protect its supply chain from future sudden supply shortages.

Rethink inventory management

Supply chain resilience has a direct connection with inventory management. To achieve more resilience, logistics managers need to re-strategize inventory management.

Just-in-time to just-in-case

Supply chain managers need to switch from the lean inventory management model (just-in-time) to a more flexible model (just-in-case). In this model, inventory buffers are placed at certain points of the supply chain in the form of safety stock to be used during future demand fluctuation.

One challenge with the just-in-case model is that storing buffers can be expensive and unsustainable. Therefore lean inventory management can not be completely removed. Supply chain managers need to study their business to design a combined approach collaboratively with their trading partners.  

Work with multiple suppliers

Another way of improving resilience is working with multiple suppliers and expanding the sourcing horizon. Another way is to work with contract or backup suppliers to hire during unexpected demand surges.

While working with multiple suppliers, supply chain managers must not create a competitive price war since this is not good for supplier productivity and will damage the partnership in the long run. Instead, the approach should be to collaboratively work towards growth and prosperity.

Improve predictive analytics and forecasting

Using data to understand future demand and supply patterns is crucial for effective supply chain management. Every supply chain manager wants to know future demand.

Advanced analytics and AI have enabled us to create accurate forecasts to reduce uncertainty in the supply chain.

• Through predictive analytics, logistics managers can determine optimal inventory levels. They can also learn the detailed requirements of every region.
• Accurate demand forecasting can also be done through predictive analytics. Supply chain managers can predict future market trends and plan accordingly.
• Production scheduling and planning can be improved through predictive analytics.
• Logistics fleet routing and scheduling can also be optimized with the information obtained from predictive analytics.

Watch how Unilever uses predictive analytics to eliminate uncertainties for its food products supply chain.

To conclude, supply chain resiliency is all about quickly adjusting to the changing environment. Uncertainties can not be completely removed from the table, but a company’s ability to quickly deal with sudden and unexpected challenges shows how resilient it is.

See how Amazon maneuvered through the disruptions created by the pandemic.

You can also check the following data-driven lists of supply chain and logistics solutions to find the option that best suits your business:

• Supply Chain Software
• Supply Chain Visibility Software
• Supply Chain Business Networks
• Supply Chain AI Tool
• Demand Planning Software

Further reading

• Top 5 KPIs To Measure Supply Chain Performance
• 3 Ways To Optimize Your Supply Chain
• Top 5 Supply Chain Trends
• 5 Steps To Improve Supply Chain Visibility
• Top 5 Technologies Improving Supply Chain Sustainability
• 3 Ways DX Can Strengthen Supply Chain and Logistics
• 7 Ways to Improve Your Supply Chain Sustainability
• Top 5 Ways Digital Twins Transforms Supply Chain
• 3 Ways to Improve Supply Chain with Automation
• 4 Ways to Optimize Logistics Operations
• 4 Ways To Optimize Procurement

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