In an era when linear supply chains have given way to vastly complex international supply networks, an industry expert has advised procurement professionals specialising in supplier relationship management to take an upbeat approach to contingency planning and view uncertain predicaments as opportunities.
Writing in Supply Chain Management Review, cloud data storage expert, Diego Pantoja-Navajas, emphasises that, in the interconnected global economy, disruptions such as freak weather conditions, trade wars, and socio-political events such as Brexit are part of the background music of supply chain management and can no longer be seen as surprises. Neither can Black Swan events. This is the new normal.
Yet supply relationship management strategies hatched half a century ago are still in use, and for Pantoja-Navajas, this must change. Contingency planning today, he argues, must cover every possibility, including the need to move away from the outmoded reliance on any single supplier or region. And cloud technology can help procurement practitioners manage and mitigate any one country’s instability or trade war.
He outlines three ‘legs’ of a resilient supply chain:
- Availability:supply chains today need no longer be existentially threatened thanks to cloud servers and internet access, which enable practitioners to hook up via laptops, desktops, or smartphones to real-time inventory and financial data. As Pantoja-Navajas says: “This guarantees peace of mind during political upheaval or even catastrophes. If a location is wiped out, access can be picked up and restarted, instantaneously.”
- Operational Flexibility and Integration:When facilities operate on a single network, silos are eliminated and new flexible options become available when fast remedies are called for – if, for example, a site has to be closed due to a political coup, supply chains operating on a single network can respond by switching operations to alternative facilities instantly.
- Enhanced Control:Integrated supply chains allow improved end-to-end visibility, allowing professionals to know exactly where inventory is at any time across the supply chain.