Fighting the Supply Chain Crisis

Not only after the Covid-19 pandemic and recent natural hazardous events, creating resilient supply chains is a common task. For most organizations, however, this is likely to be a challenge given the analytical and practical problems to be solved. Even when appropriate measures have been identified, many struggle to balance resilience measures like safety stock and multi-sourcing with cost and competitiveness.

Does it have to be either resilient and flexible or efficient and competitive?

Most industries are exposed to unpredictable changes at increasing pace, but many companies still focus on short-term profits. Consciously neglecting adequate risk management, they put fragile supply chain networks at risk, such as the current semiconductor crisis resulting in more than 200 billion dollars loss of revenue in 2021.

Most companies lack

• Sufficient supply chain transparency
• Comprehensively managed resilience strategies and measures

The data short comings along the supply chain are divers

What are the adequate measures to achieve sufficient resilience for supply chain?

Companies need to understand:

• What is the heat level of the supply chain network, i. e. maturity, risk exposure, vulnerability?
• What measures are effective and efficient for additional flexibility, mitigation?
• What preventive measures are mandatory?

Disruptions vary based on their severity, frequency, and lead time – and they occur with regularity

How to create a resilient supply chain

Our five-step approach balances resilient supply chains and cost competitiveness:

1. Assess your individual heat level for a) uncontrollable and b) manageable risks
2. Define a catalogue of mitigation actions, both reactive and preventive
3. Develop company-specific resilience KPI
4. Prioritization of actions based on best cost risk ratio
5. Rigid delivery and progress tracking