Ever since COVID-19’s onset, academics have been weighing in on the best ways to address supply chain weaknesses and rebuild the industry. Take, for example, this whitepaper by Michigan State University’s Department of Supply Chain. Many of their recommendations make sense—until they start talking about resilience.
I’ve recently written about resilience: an industry buzzword that has become a favorite amongst pundits when pitching ways to rebuild supply chains. In reality, resilience represents a woefully outdated model, bound to lead us backwards. A dynamic, agile model is the true-blue superhero of supply chain—here’s why.
MSU’s Half Right, Half Wrong Take on Supply Chain
MSU’s article explains how the industry’s tunnel-vision emphasis on efficiency and speed overlooked critical vulnerabilities exposed by the pandemic. It then predicts that as companies respond to those weaknesses, there’s an opportunity to rebuild “supply chains that have better levels of financial, competitive and legal resilience.” MSU makes six recommendations for companies to follow:
- Carry out a post-mortem review
- Realign distribution methods through practices like offshoring and network modeling
- Diversify sources for materials
- Digitize supply chain operations
- Ensure end-to-end visibility through the supplier process
- Install supply-chain leadership and training
Don’t get me wrong: due diligence, digitization, and excellent leadership are all valuable practices. But any steps taken to improve supply chain need to start with the right framework in order to succeed—and resilience isn’t it.
Why Resilience Works Against Supply Chain
The resilient supply chain model wants to rebuild supply chain through relying on the same practices that left it vulnerable to the point of collapse. Diversifying source materials, offshoring, and switching to domestic warehouses haven’t worked for the past 20+ years—and they certainly won’t work now. Instead, companies need to focus on building a dynamic supply chain model that:
- Understands the unavoidable volatility and problems of running a supply chain
- Responds to it with the right technology + exception management processes
This combination enables in real-time the agility and responsiveness that MSU nods towards, while discarding outdated and laborious practices.
Take for example, Elementum user Vitamix. During the pandemic’s height, Vitamix leveraged the real-time SaaS platform to increase communication between teams, identify supply chain incidents, and assign peer-to-peer accountability for resolution. These improvements allowed them to meet a 20% increase in demand over forecast, shorten incident resolution time, and streamline their entire S&OP process—no lengthy reviews or reassignment of resources necessary.
To break it down, here are the three must-haves for a dynamic supply chain:
- Visibility into problems occurring in supply chain operations that provides a single source of truth and enables actionable insights;
- Clear accountability for understanding necessary changes and how to make them;
- Analytics that empower supply chain with automated root cause analysis for making sustainable changes.
The pandemic may have pushed supply chain to the brink of a long-overdue change, but companies don’t have to go over that edge alone. A supply chain services management platform like Elementum can help your company improve its operations within just a matter of days. Visit our website or email me at email@example.com to learn more.