Visionary Chronicles: How to Strengthen your Weaknesses
In Bryan Smeltzer's podcast, he discusses how businesses have identified the need to update, replace or reimagine their supply chain.
When the pandemic struck, many companies were forced to address their supply chain, and what they found was a weak foundation, one in need of repair long before the pandemic.
In working with global leaders of these brands, we found complacency where as long as the wheels were turning, all was good. It was not until the wheels stopped that they recognized an inadequate "fail-safe" supply chain.
The pandemic forced these companies to address their supply chain "weak links," strengthen these weaknesses, and assure they can absorb future disruptions. In this instance, they merely looked to manage the pandemic the best they could within the circumstances. They licked their wounds with both consumers and retailers.
In most instances, the strategy they deployed, such as lean manufacturing, was effective while their supply chain was moving, but when it stopped, it proved deadly. The lean method is still an effective strategy but needs additional foundational support around this structure. Support pillars such as; enhanced (multi-category) replicated sourcing, alternate geo-sourcing where political moves do not constrain capacity, increased capacity, and safety stock.
While consumers continue to demand quick-turn at lower prices, what is a brand to do without losing its competitive edge?
There are several key factors when evaluating your supply chain to determine your "fail safe" status;
• Risk ID; identify potential risks associated with your supplier base. Issues that need addressing;
a. Narrow production skillset and outsource component risk. It is crucial to ensuring the vertical supply chain continues to flow. As they say, "never allow a single component to stop a complete unit from shipping."
b. Manage bandwidth, along with sourcing priority and flexibility. During a crisis, you need to be "top of the food chain" when it comes to contractor priority, and your contractor needs to ensure they have sufficient bandwidth and core expertise to handle sub-contractor "off-loads.
c. Single source and geopolitical exposure. Ensure you are not held captive; you need to reduce risk exposure.
• Chain Map;
a. map your complete supply chain from end to end! Identify potential threats that could stop the flow. Keep the river running!
a. diversification is critical; ensure you have a diversified supply chain from capacity, core skillset, and regional perspective.
b. Replicate, refine and qualify contractors before you need them. It is a part of brand complacency; they do not need to replicate and expand if the current base is performing. You NEED to think of the "what if's?
• Loosen Lean;
a. Continue with Lean, but add some FAT! The rainy day will come, it is best to have an umbrella when needed.
b. Add Safety Stock.
• Tech your Processes;
a. Wherever possible, find ways to improve processes and make teams/production more efficient. As a result, you will build a better product and make your brand more competitive.
b. Add Tech, but Teach! Don't just add and move on- add and Move-in, teach others!
Not all Brands suffered through the pandemic, but most used this as an opportunity to improve!