A new framework to reconfigure supply chains for resilience
Author: Adam Sawley
Supply chains are under intense scrutiny as organisations’ have had to rapidly evaluate disruption risks and develop mitigation plans. The operational mapping and reconfiguration of supply chains is taking place sector-wide, as organisations take on new responsibilities and respond to changing demands. Adam Sawley, Head of SAP Consulting at DXC Oxygen, provides a supply chain framework that will enable organisations to mitigate risk and act on opportunities in the new market.
Supply chain risk management framework for the new economy
As organisations redistribute the available funds to business-critical initiatives dictated by their continuity plans – a new set of business priorities will come into focus. It is essential the actions taken to mitigate immediate risks and consider the longer-term aspect of how the business will perform in the new market. To do so, it is important supply chains are mapped as part of an ecosystem (not in isolation).
To assist organisations with this process, DXC Technology has provided a guided framework outlining what supply chain capabilities will be required to be deployed or enhanced as organisations move into the new economy. This is illustrated below:
Figure 1. Supply chain capabilities required to build resilience in this market
Reconfiguring the supply chain to focus on the above areas will enable organisations to mitigate risk and act on the opportunities this disruption is generating in the market.
Organisations that do not focus on demand and consumption sensing, or don’t reconfigure their operations, will begin to over or under supply their goods or services and face subsequent challenges.
Practical examples of supply chain reconfiguration
Sourcing: A global consumer goods company partnered with third-party logistics’ vendors to level out supply and demand through better management of inbound and outbound logistics. It selected categories impacted by disruption with high consumption and demand signals, and shared all its data to make sure that neither capacity, price increases or surge in demand disrupted the flow of goods. The rapid execution of this strategy enabled it to maintain service levels and increase its market share.
Production: Modularity is a fast track way to execute a re-purposing strategy. Many manufacturers are reconfiguring their manufacturing plants for large scale production of products in high demand. Innovation, collaboration and reinvention are the principles of successful mitigation plans.
Service Delivery: A chemical manufacturing organisation deployed AI and analytics capabilities across its asset and service management teams to quickly reconfigure its critical assets’ risk profile and, as a result, remap its work and maintenance plans minimising production disruptions. This strategy reduced production line maintenance shutdowns and increased service level agreements with customers by deploying the workforce to the most critical jobs.
Moving the business forward
For best practice supply chain management in the new environment, organisations’ will need to embrace the following key capabilities:
- Visibility and transparency of the entire supply chain
- Flexible and rapid planning cycles to adjust to demand
- Investment in modular manufacturing
- Implementation of digital supply chain and smart factories
- Cloud-based manufacturing and planning solutions
- Collaboration through networks
In summary, organisations will need to re-distribute available funds and business resources towards developing capabilities in areas covered by our framework. These, in addition to a long-term scaling and sustaining strategy, will set organisations up for success moving forward. If you are facing supply chain challenges, looking to reconfigure your operations or would like to share how your organisation is adapting in the new economy, please contact us at oxygen.info@dxc.com.