Supply Chain Rebuild your supply chains to ensure timely access to - - PowerPoint PPT Presentation
Supply Chain Rebuild your supply chains to ensure timely access to all inputs your business requires In partnership with www.b3cmsme.org 1 Key questions to be addressed Why do we need to focus on supply chain? 1 Which component(s) of
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Rebuild your supply chains to ensure timely access to all inputs your business requires
In partnership with
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Key questions to be addressed
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! Estimated 75% of companies are seeing disruptions in supply chains as a result of COVID19 pandemic and lockdown ! Even after the lockdown, the next crisis is not so much a matter of ‘if’ but ‘when’ ! Uncertainties and their impacts are difficult to model and assess; hard information is lacking ! Suppliers & customers in lockdown areas depleting/ depleted/ idling stock and work in progress inventory ! Major risks in meeting contractual obligations potential time- and cost- overruns ! Decades-long focus on supply chain optimization minimized costs, reduced inventories, high asset utilization minimized buffers and flexibility high vulnerability to supply chain disruptions Current disruption provides an opportunity to ► To gain deeper understanding of strategic operations and supply chains ► To spot ‘areas of improvements’ within current supply chains ► To develop more collaborative and resilient relationships with critical suppliers & key customers ► To instill agility & resilience in operating models to strengthen preparedness to face any disruption
The need to focus on the supply chain
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4 Maximum impact felt in the upstream component: affecting supplies, suppliers and logistics available Tier-2 suppl. Tier-1 suppl. Manufacturer Distributors Retailers Consumers Upstream Internal Downstream B2B B2B B2B B2B B2C Direction of flow of demand Direction of flow of product A typical supply chain Typical aspects of the supply chain components Disruptions along all components of the supply chain
The crisis
Which component of the supply chain to focus on?
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Supplies Suppliers Logistics
Enhancing visibility of supply chain and ensuring availability
Facilitating supplier risk management and collaborative relationship, and securing capacities to meet requirement
Securing reliable, feasible and economical transportation and storage options
Upgrading procurement capability to make it agile and more responsive
Procurement
Strategies for restoring supply chains: Focusing on 4 key areas
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Supplies
Targeted outcome: Enhanced visibility of supply chain and Secured supply-capacities
Determine business exposure by identifying current buffer inventory & short-term requirements Enhance inbound materials visibility (lead time, delivery schedule, etc.) Identify strategic and concentrated supplies at risk Map critically sourced materials to high-value products and revenue streams Use pre-approved substitutions for parts or raw-material (where primary sources are impacted) Consider product redesign or material certification resources (where secondary sources are not available)
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Suppliers
Targeted outcome: Supplier risk management and Collaborative supplier relationship
Evaluate Tier-1 suppliers’ risks & capacity to meet the requirements; access real-time supplier data Secure capacity for Tier-2 & Tier-3 suppliers Identify and activate alternate sources of supply/ secondary suppliers Work with critical suppliers to balance supply & demand; logistics-based costs & buffer stock Review contracts with key suppliers to understand liability in the event of supply shortage Explore resource-sharing with other enterprises (material exchange, sharing common inventories, etc.)
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Logistics
Targeted outcome: Secure, reliable and viable transport and storage options
Assess supply routes and transport options; determine current feasibility (availability, costs, permissions) Evaluate alternative inbound logistics options and outbound logistics options and secure capacity Explore faster transportation options Keep updated on imposed city/ state- specific restrictions (affecting transport and deliveries) Rapidly model alternate supply and transportation scenarios (such as re-routing around a hub/port) Explore resource-sharing with other enterprise (lending of idle transport)
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Procurement
Targeted outcome: Agile and responsive procurement capabilities
Plan procurement considering current exposure (WIP buffer, inventory in transit, warehouse, spare, etc.) Buy-ahead to procure inventory and raw materials (in short supply in impacted areas) Re-orient procurement to updated inventory planning parameters (to be able to manage crisis) Prioritize procurement on the basis of criticality of supplies mapped to high-value products and revenue streams) Update procurement manual to include the priority-list of what products will be produced in the event of raw and direct material shortages
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Cross-cutting approaches
Value chain assessment of all risk factors that may escalate costs and impact service and inventory capabilities, taking proactive action to address anticipated shortages Scenario planning: Developing and implementing enhanced risk management practices; Creating pre-emptive action plans; Making effective trade-off decisions and to identify sweet spots End-to-end supply chain management: Ability to model and predict demand; Ensuring supply chains can cope with demand and expectations; Ensuring agile replenishment processes Technology upgrades, ICT and analytics: Re-designing the way employees collaborate with each
web-based fraudulent actions/ items such phishing, malwares, etc. Focus on resilience: With learnings from the crisis, moving toward more comprehensive proactive modeling; Controlling further dimensions of supply chain; Longer-lasting reconfigurations of supply chains to build resilience
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The approach for implementing the action plan
Operate
Execute the plan & monitor results
Mobilize Prioritize Analyze Configure
Mobilize resource team; initiate response plan; establish operating rules to all supply chain interventions; contingency management Prioritize new risks and implications to supply chain components and products/ services Analyze what-if scenarios and protocols for source, plan, make, distribute and service implications Configure and tailor the network and product flows to execute the protocols The approach for implementation will be a mix of Kaizen and Business Process Re-engineering, and will comprise following steps
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Rebuild your supply chains to ensure timely access to all inputs your business requires
In partnership with