Dealing with Shortages and Building Resiliency

Is your supply chain impacted by shortages? 

As we continue to emerge from a global pandemic, shortages are expected to continue to impact supply chains from microchips to oil. In fact, Gartner has recently projected that the global semiconductor shortage will run through the second quarter of 2022. These shortages will impact all products with electronic components. 

Certainly supply chain managers have always managed part shortages, but many experts are saying the impact is greater at this point in time because of global interconnectivity.

So how do you build more resiliency into your supply chain during such turbulent times? 

The Association for Supply Chain Management recently shared six tips for resilience building in supply chain per Joseph Fiksel, professor emeritus, The Ohio State University. Fiskel says traditional risk management works when supply chain organizations understand the magnitude of a disruption, but true resilience can only be achieved when the total risk landscape is understood.

Six Tips for Resilience-Building

“Resilience is the ability to survive, adapt and flourish in the face of turbulent change,” Fiksel explains. Here are six strategies he offers for building resilience in a supply chain among the competing threats of COVID-19, social unrest, cyberattacks and climate change.

1. Embrace flexibility with regard to operations, where you get supplies, how they’re transported, and how to overcome shortages.

2. Use information technology solutions to know where your products and inputs are at any time, whether it’s incoming or outgoing, timely information about the status of these products, or early warnings about delay and disruptions.

3. “Drive down decision-making to where it’s most effective,” Fiksel says. “Give managers the autonomy to understand a new threat and act to prevent it.”

4. Invest in communication tools and third-party services for real-time updates and information.

5. Dispersion of assets. Distribute your assets in several plants to be less prone to disruption. It’s also important to engage with your community. When global supply chains are disrupted, there may be more potential for locally sourced goods and services. Plus, sourcing materials from small and medium enterprises can build organizational resilience, strengthen local economies and improve employee morale.

6. Companies can’t go it alone: Work closely with both suppliers and customers to raise flags and build mutually rewarding relationships.

As you work through your plan, balancing agility with lean will be important as we discussed in our recent article on lean versus agile supply chains. In addition to working closely with your suppliers and customers, we are also here to help! At ASCM Wisconsin we support supply chain professionals at all stages of their careers with the information and education they need to remain competitive in an ever-changing world. Learn more about our upcoming classes and events at: www.wisconsin.ascm.org or send us an email at: [email protected].