The need for resilient supply chain networks
In today’s volatile market landscape, leaders face ever increasing uncertainty, making supply chain resilience a critical priority for global organisations. However, knowing where to start on the journey to increasing supply chain resilience can be challenging.
Uncertainties and disruptions vary in size and severity, from geopolitical conflicts and pandemics like COVID-19, to smaller everyday disruptions like strike actions and hazardous weather. Despite varying magnitudes, these disruptions all have the same eventuality; loss of value within the supply chain and damage to customer experience.
Consequently, building robust, adaptable supply chains is essential for long-term sustainability and resilience.
Our Managing Director, Harry McCarney, recently joined Maria Villablanca on her Transform Talks podcast for supply chain leaders. The episode sheds light on misconceptions of supply chain resilience, such as why traditional approaches to planning are causing supply chain fragility. Maria and Harry also discuss how leveraging data for strategic decision making and probabilistic planning can help supply chain leaders future proof their businesses.
If you haven’t listened to the podcast yet, you can listen now on Apple Podcasts or Spotify.
Not quite got the time to listen at the moment? Read on for the summary, offering valuable insights on how to build a more proactive and resilient supply chain.
Key considerations for building resilient supply chains
Proactive planning vs “Firefighting”
Traditionally, supply chains use deterministic approaches to planning and forecasting, focusing on singular, fixed scenarios. This approach leaves little room for when things inevitably don’t go to plan, leading to constant “firefighting”. This triggers cascade effects throughout the network, causing value leakage and damaged CX.
To reduce sensitivity to prediction errors and uncertainty, leaders should adopt probabilistic planning techniques to ensure their network can withstand disruption. This approach ensures success across a range of scenarios, helping leaders better manage demand, supply, and lead time variances when faced with the unforeseen.
Ultimately, shifting from linear, deterministic planning to probabilistic techniques enables leaders to move from reactive to proactive strategies.
Connecting resilience and sustainability
As resource scarcity and regulatory pressures increase, the need for companies to adopt sustainable and resilient practices is increasing. However, many leaders still overlook how closely these concepts are linked.
We partnered with Saint-Gobain, delivering insights and digitisation to guide the adoption of circular economy for waste management, increasing both resilience and sustainability. By remanufacturing waste gypsum, Saint-Gobain reduced waste, emissions and their dependency on raw materials, accelerating their Net Zero targets and ensuring a reliable, closed-loop supply chain.
Understanding hidden drivers of key metrics
Most organisations track high-level KPIs, but they often lack a deeper understanding of the underlying secondary or tertiary drivers of these metrics.
Statistical models and simulation can uncover these hidden dynamics, revealing how different metrics correlate. By leveraging digital models, leaders can gain insights into these complex relationships, empowering them to make more informed strategic decisions.
The role of digital models in building network resilience
Leaders looking to build resilient supply chains should invest in technology that enhances visibility, understanding and decision-making. Digital models enable this by simulating complex scenarios that can’t be tested in real life without risk. Validated using historical data, these models explore potential impacts of scenarios like increased demand, supply shortages, or logistical delays.
These models empower leaders to base decisions on empirical data, rather than assumptions. We helped CHEP, the world’s largest pallet network, optimise and de-risk their asset serialisation rollout, running simulations to reveal how different scenarios and uncertainties would impact their network. CHEP now uses our models for all strategic decisions, saving millions per initiative.
Data science and scenario exploration for resilient network design
We use data science, simulation and scenario exploration to help leaders around the world tackle complex supply chain challenges. By adopting a probabilistic approach to supply chain planning, and incorporating uncertainty management into strategy and approach, large organisations can reduce their sensitivity to prediction errors and unforeseen disruptions, enhancing supply chain resilience.
This is helping our clients to make better strategic decisions and ensure value isn’t lost to uncertainty, enabling them to gain competitive advantage and transformative ROI through improved customer experience.
If you are a supply chain leader aiming to drive long term improvements in sustainability, resilience and efficiency for your network, email us at info@hackandcraft.com today to speak with one of our experts about how we can help you overcome uncertainty and drive transformation.
