24 Oct 2023 -
 Industrial

Crafting a robust supply chain for the new era

The pandemic’s aftermath has left global supply chains in turmoil. Amid the upheaval, manufacturers are acutely recognising the multifaceted challenges they confront and are on a quest for solutions. But, the path to resilience isn’t linear; it’s intertwined with various business operations.

According to New Electronics, a supply chain’s revival requires holistic strategies. From inception at the design phase to the culmination in warehouse logistics, a seamless fusion is vital. However, the days of uninterrupted global supplies may be numbered. Hopes of a full recovery by 2023 might be optimistic, as periodic disruptions are part of the landscape. McKinsey highlights that significant interruptions happen roughly every 3.7 years, indicating that these aren’t pandemic-exclusive phenomena.

The clarion call for businesses is clear: their supply chain strategies must epitomise agility, flexibility, and resilience.

A pivotal starting point is the design phase. It’s a juncture frequently overshadowed, yet teeming with potential pitfalls. Key questions loom: are components readily available? Can delivery deadlines be met? Is there diversification in suppliers? Are cost-effective alternatives at hand? Addressing these questions upfront can prevent downstream upheavals. By cultivating strong, long-lasting partnerships with suppliers, businesses can safeguard their interests. Continuous dialogue between developers and supply chain experts is the linchpin, helping nip issues in the bud.

The next phase involves re-evaluating production locales, especially in the face of geopolitical instabilities and escalating transport costs. Three strategies are in the limelight: reshoring, nearshoring, and ‘friend-shoring’. Reshoring is a pivot towards domestic manufacturing, emphasising design-production synergy. Nearshoring explores closer, cost-effective production hubs, with Eastern Europe already emerging as a trusted ally. Friendshoring, meanwhile, values political, linguistic, and cultural harmonies. By aligning with countries sharing common values, businesses can bolster economic partnerships.

Yet, there’s no universal blueprint. Companies must judiciously choose their strategy, bearing in mind their unique challenges and past offshore investments. Diversifying supplier portfolios is also gaining traction, serving as a bulwark against potential disruptions.

The inventory management landscape is also being redrawn. The historical ‘just-in-time’ approach is ceding ground to the ‘just-in-case’ model, triggered by the pandemic’s unpredictability. While this new model promises safety, it also brings inherent costs, demanding a fine balancing act between procurement and storage expenditures.

To steer through this intricate maze, collaboration is indispensable. Tapping into expertise, especially during product development, can unlock alternate supply avenues. Embracing this strategic shift demands resources, time, and collaboration. Yet, the rewards are manifest: a fortified supply chain, poised to meet future challenges head-on.

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