Key In on Supply Chain Resiliency Through SI5ES

Measure the readiness of supply chain to deal with uncertainties and risks


The methodology ties all subject areas and their concepts together. Infrastructure is the hardest and most tangible subject and pivotal analysis is performed around it while people and process are tied in. Ignoring one or all aspects is a common mistake and results in less than optimal preparedness.

In case of a potential catastrophe, it is important to identify: which supply chain characteristic is most likely to present the greatest constraint: infrastructure, processes or people?

While developing the analysis for a network hub, it is critical to identify how sites mature with time. While the traditional role of the sites is to provide value-added activities—such as late-stage order fulfillment with improved demand data—they can also be a buffer against uncertainty in supply performance; demand volatility while providing effective respond/recover strategy; as well as redundancy/resiliency in your supply chain. Such redundancy is a critical consideration especially during start-up stages and for longer-term resilience.

PHASE 3: Identify supply chain resilience priorities for zones, hubs and sites—Based on the emerged understanding from the prior phases, how can one describe the strategic reality of the zones and hubs? The key is to apply the strategic frameworks developed as a part of phase two and add more detail. At this phase, this translates into the slotting plan for the picking area. What does this process expose in terms of assumptions, expectations and mitigation opportunities?

During Phase three, it is imperative to define the requirements which will achieve your end-state goals. This is followed by a careful exercise to pare down requirements resulting in a simple working model, while concurrently enabling significant resilience without sacrificing cost and service. Engineers or supply chain practitioners can easily overload features, functions and details that add complexity. Beware of the temptation to over-complicate details as it could potentially increase the likelihood of cascading failure in case of potential catastrophe.

PHASE 4: Develop supply chain mitigation and a preparedness framework—This phase specifies the requirements and results in a master supply chain mitigation and preparedness framework with tasks, resources, times, sequence and interdependencies.

Reacting to a potentially catastrophic event requires a heavy presence of external support from contractors, subcontractors and government officials. To keep everyone on the same page is a critical management challenge—be it vertical, horizontal, across functions and beyond the company borders. A master framework is a key document for everyone to follow. This should include clearly defined tasks, accountabilities, expectations, timelines and interdependencies. A common glossary of terms, reporting at right levels, scorecards on the progress, obstacles in achieving the goals, conflict resolution, clearly defined escalations and priority management is critical to successful startup. Clearly defined communications, forums and participants have to be established well in advance to ensure that the right partners are involved at all steps. Tasks defined as a part of the master plan should be relevant, measurable, clearly defined hand-offs and output expectations. Each master framework should have multiple alternatives in place for unforeseen problems, as well as a process for identifying opportunities to break up interdependencies between tasks.

PHASE 5: Resiliency program execution—The final phase is coincidental with a potentially catastrophic event. The frameworks previously developed are implemented to restore or redirect supply chains and, if possible, recover supply chain strategic capacity and local capability. It is highly recommended to actively review and renew the prior phases of work. Process evaluation includes all processes, communications, personnel engagements, conflicts and scope management. It essentially asks: ‘If we had to do this all over again, what would we do differently? What should and shouldn’t we have done?’

Getting ready for a potential catastrophe includes putting together a systematic readiness checklist for infrastructure, process and people. It’s critical to check that of each of these components works in the exercise phase.

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