Is Your Supply Chain Prepared to be Disrupted?

05/29/19

Has your supply chain been impacted over the past year by unexpected weather or global tariff changes? Do you have a plan to mitigate risk for similar future events?

At APICS Greater Detroit, the premier professional association for supply chain management, we help educate our members and the community on how to prepare for the unexpected.

As you know, the extremely low temperatures that hit across the Midwest last winter impacted many supply chain components including all forms of transportation and abilities to maintain production levels with plant closures and employee absences. Other extreme weather such as droughts, hurricanes, and floods also often cause disruptions in supply chains globally. Recent changes in global tariffs have also caused uncertainty with suppliers, distribution and logistics.

Earlier this year, Terry Tuttle, president of HellermannTyton North America, shared with BizTimes that her company is very alert to the volatility of the macroeconomic world we live in. In fact she stated she believed the level of volatility was higher than any time she could remember in business.

In support of Tuttle’s comments, according to global supply chain disruption monitoring company Resilinc, the number of global supply chain disruptions increased by 36 percent in 2018!

So how do you best prepare for disruptors in your supply chain? At APICS, we suggest the following three risk mitigation strategies:

Invest time in careful preparation, risk analysis and contingency planning in case of both natural and man-made disasters and ensure you have the best people in place to monitor your suppliers.
For your critical suppliers, representing at least 25% of your supplier network, you should document the following items and review them quarterly:

a. Their performance levels with regards to quality, schedule and price

b. Identified risks such as the likelihood of these suppliers getting bought out, financial strength, the quality of your relationship with them and locations that could be impacted by both natural and man-made disasters

c. Document their length of time in business, how much research and development they do and if they are in danger of a buyout or merger

d. Have suppliers answer these key questions in writing.

3. Develop a specific risk mitigation action plan for each supplier to mitigate future risk including:

a. A list of companies you could shift work to, if necessary

b. Estimates of how long it would take to shift work

c. An understanding of how much it would cost you

Overall, while most companies know the key is preparedness, many lack sufficient or current plans to handle extreme weather, disasters or tariff challenges. You must make the effort now to determine if your organization can handle a major shutdown or break in your supply chain.

As an additional resource for you, APICS conducted a supply chain management risk survey a few years ago with more details on protecting against supply chain disruptors.

As the premier professional association for supply chain management, APICS Greater Detroit will be hosting a full day seminar on the Principles of Distribution and Logistics on August 15th. This seminar is designed to introduce operations management professionals to the field of distribution and logistics management in an era of unprecedented change.

Attend this seminar to learn how to:

Use ”push” and “pull” inventory replenishment in a multi-echelon environment
Integrate new technologies to your distribution channels
Be mindful of sustainability and “green” issues Measure performance to ensure optimal efficiency and productivity
Support Customer Relations objectives using warehousing
Decide when you should be using the various types of transportation modes
Set objectives for warehouse design, automation, equipment, and layout
By the conclusion of the seminar, attendees will have a clear knowledge of the fundamentals of distribution and logistics functions and objectives.

For additional information, please contact us via our website at www.apicsdet.org. We look forward to helping you learn more about how to prepare for supply chain disruptions.