By Dr. Tom DePaoli
What are some tactics to avoid a supply chain meltdown, especially an unforeseen or calamitous event? None of us wants to experience a supply chain zombie-like apocalypse. Many organizations are starting to use ISO 28000 certification to assist in reducing supply chain risk. I recommend an alternative multi-faceted approach.
There is no one-size-fits-all. As the importance of supply chain management grows leaps and bounds, the supply chain professional must develop multiple options and proficient tactics to ensure the continuity of the supply chain. A key element in lessening supply chain risk is to have an alternative or backup supplier. With many organizations sole-sourcing now, having a backup supplier may seem like an antiquated traditional tactic, which has no place in a deep relationship or partnering strategy with a supplier. Be advised: It is necessary.
There are also many risk assessment methodologies available for the supply chain professional. The insurance and investments industries have many models to assess risk. The issue, as usual, for the supply chain professional, is finding the time to assess the risk and to plan for alternatives. Here, a gradual stair-step approach works. First, ensure your sourcing methodology addresses risk and the need for backup suppliers. Focus on your critical materials and services, not the typical off-the-shelve items. Do not be afraid to ask your prime supplier or a distributer for a recommendation for a backup supplier or alternative materials. Complete a small actual order from the backup supplier to ensure their capability to deliver.
In my book, Avoiding a Supply Chain Apocalypse, I note that there is no single silver bullet or quick fix. The supply chain professional must be creative and diverse in their tactics to sustain the supply chain.
Many organizations have in place a crisis management team that has written procedures for incidents like threats to employees, gunmen intrusions etc. Often they are led and formulated by Human Resources.
The supply chain organization should also have a crisis management team that creates written documentation for various supply-chain meltdown scenarios. This is a great subject to network with and gain knowledge from other supply chain organizations.
Finally, a supply chain organization can never completely eliminate risk, but it can plan ahead for the inevitable disruptions to the supply chain.