Five Ways to Fortify Your Supply Chain | Black & Veatch

Five Ways to Fortify Your Supply Chain

Enhance Your Supply Chain Resilience Using These Key Preparation Steps

Five Ways to Fortify Your Supply Chain

In today’s global economy, major supply chain disruptions can occur at any moment. Cyberattacks, natural disasters, labor strikes, chip shortages, COVID-19, rail embargoes, wars, government policy shifts and many other factors can prompt that dreaded text or call in the middle of the night that sets off a chain of alarms. How you react will in large part depend on your preparation for such events.

The good news is there are plenty of meaningful steps you can take now to mitigate the impacts of potential issues. To create dynamic contingencies, your approach must include “when I encounter a surprise,” not “if.” This is not an exercise in creating a dense guide that sits on a shelf gathering dust – the goal is to have a dynamic plan that builds resilient, robust, and engaged supply chains for practical applications. Thinking broadly across multiple supply chains will allow your teams to be prepared, as well as involving stakeholders across your organization in this vital planning effort. Based on our experience, here are five ways you can ensure your supply chain is well-fortified:

  1. Map out your complete supply chain, then map out your suppliers’ supply chain – This is an important tool to identify gaps or potential problems. Find out what transport networks your suppliers depend on to see if they share some of the same transport pipelines across truck, rail and barge carriers. Dig into the backup power generator capacity of your suppliers, and your suppliers’ suppliers, for that matter. Look at their backup fuel supply planning and how much of their footprint is covered. Be prepared to go deep into multiple chains if appropriate. Work with your key suppliers to understand cost and delivery impacts, strengthening your relationships as well as terms and conditions. The framework for this mapping should be created in a way that makes it easy to update and adjust as you learn more.

  2. Put your plan into action, don’t just create a desktop exercise – You’ve identified a few potentially good backup suppliers, now actually purchase something from them. This will tell you how quickly they can deliver if you need to factor in sourcing contingencies. It doesn’t have to be a large order, but it is something that gets them in your accounting system, establishes a real-life business relationship and allows you to see if there are quality issues to deal with ahead of time. Be open with them in discussing your supply chain needs and establish regular touch points to stay engaged.

  3. Digitize your planning and make it visible to all key players involved – Replace silos with cloud-based planning software to increase visibility and engagement. Make sure all leaders and department heads have access to it and understand its purpose. Organize it intuitively, update it regularly and notify key personnel of the latest changes. Consider prioritizing ongoing software training to ensure all key personnel can access the information they need.

  4. Form a team with true authority to make quick decisions – Supply chain disruption is not solely a procurement issue –it is an enterprise-wide challenge that is very real, with potentially millions of dollars at stake. Therefore, buy-in and active participation from all leadership departments is paramount. Integrate broadly and get other key departments involved. They may have some contingency plans of their own, but the details may not be more widely shared. This is the time and place to share that vital information. Make sure you identify by name the people who own the process within each group.

    • IT Department: This group likely has plans in place for cyberattacks and malware, but how visible are they? Find out how much of your IT is cloud-based and how much is dependent on on-site servers or storage.

    • Finance: Discover how quickly you can get an emergency purchase order approved and the chain of command that needs to be followed.

    • Human Resources: Find out about the process for canceling a shift or how to quickly add personnel if the situation warrants.

    • Public Relations: This group may already have a crisis communications plan in place. Make sure you have a solid process for communicating with employees in an emergency, as well as issuing any public advisories.

  5. Make contact now with public entities and build sources for the most accurate local and national information –Take the time now to find a couple of solid and trustworthy sources – especially local ones – and discover what information they can provide in a time of crisis. These can be government entities, industry organizations or local nonprofits. By making contact proactively, you’ll be armed with the best information possible to protect your chain and your employees.

In summary: The purpose of these five steps is to identify potential gaps in your supply chain and have contingencies in place to quickly address any disruptions. What can your firm do to help close those gaps? It may mean new storage facilities, on-site or off-site. It could mean additional outsourcing will lead to better contingency plans. Take the time now to evaluate your current business relationships with your suppliers. What can your firm do to strengthen those relationships?

Supply chain contingencies need to be at the forefront as much as financial statements, sales goals and product and service targets. In the end, it isn’t just so you have a Plan B, C or D to turn to if Plan A fails, but it contributes greatly to operational efficiencies and the future health of your organization. So when (not if) an emergency text arrives in the middle of the night, you can orchestrate a response with confidence.

To learn more about safeguarding your supply chain from disruptions, contact our experts to review your current needs.

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