22 commandments for a more resilient supply chain

The recent changes in the environment have exposed vulnerabilities and accelerated preexisting challenges in supply chains. Here is a suggestion of “22 commandments” that may help build a more resilient supply chain.

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1.?Characteristics of future-ready organizations include removing opacity in communication for improved clarity and allowing more educated projections.

2.?Shifting from a reactive to an anticipatory and collaborative approach is essential to go beyond the basics of managing disruptions and bottlenecks.

3.?Structural reforms are needed to reimagine responsibilities and relationships based on pertinence and sharing of information through interactive and participative system design.

4.?To best tackle challenges, a 3-prong approach is essential, focusing on visibility, readiness, and adaptability:

·???Advanced, and moreover interactive analytics play a crucial role in better forecasting, decision-making, and adaptive response.

·??Robust optimization processes are necessary to ensure efficient supply chain operations.

·??Improved agility enables organizations to respond quickly to changes, uncertainties, and events that create disruptions.

5.?Developing and embracing collaborative tools leveraged by cloud-based platforms facilitates efficient communication and cooperation with suppliers.

6.?Digitization of the connected end-to-end supply chain enhances efficiency and transparency; ERPs integration for intelligent dialogs enable effective decision-making based on real-time data and adjustable priorities.

7.??Awareness that we operate in a VUCA environment fosters the development of close-to-antifragility approaches; tradeoffs must not only be defined,but embraced.

8.?Driving results through Objectives and Key Results (OKRs) rather than merely measuring Key Performance Indicators (KPIs) can greatly contribute to improvement.

9.?Adopting a cascading sequence of clear responsibilities and actions for Tier n+1 suppliers and their related risks is critical to ensure resilience – a chain is only as solid as its weakest link.

10. Flexibility in production through a combination of dedicated and re-allocable resources enhances adaptability.

11. Flexible management and customization of products supports likewise adaptation, offers additional alternatives, and reduces risk.

12. Moving faster to increase the proportion of software-defined products enables agility and customization.

13.?Conversely, prevention of the increased risks of cyber-attacks risks must be an integral part of the architecture of the management system.

14.?Attention to macro factors and macro risks such as consideration of geopolitical risks and integration of environmental and sustainability demands is crucial for shaping sourcing and procurement strategies.

15.?Capturing weak and early warning signals with the proper level of discrimination is essential to prevent the butterfly effect in an ever globally connected world; AI provides useful resources in this area.

16.?Identifying dependencies and depth of involvement, even up to the raw material level if necessary (example: lithium for battery cells), ensures resilience in supply chains. Hedging is not a bad idea.

17.?Building (jointly with suppliers) digital twins for end-to-end stress testing of the organization allows simulation and planning for extreme scenarios and disruption events.

18.?Regionalization, networks creation, and nearshoring can be effective strategies to reshape supply chains for increased efficiency and robustness.

19.?Well-designed and mutually re-enforcing dual or multiple sourcing as well as partnerships can minimize risk and create a dynamic that benefits all parties.

20.?Smarter inventory and production management approaches, including dynamic inventory policies, should be considered instead of relying solely on just-in-time or alternately, buffers.

21.?Stress testing supply chains through simulation and planning of extreme, “6σ+”?events enables the design of proactive mitigation and remediation.

22.?Pre-programmed updated mitigation and remediation procedures enhance responsiveness to disruptions.