The global coronavirus crisis shocked supply chains this year, causing a lot of disruption but also setting the stage for something unexpected — the C-suite finally understanding the need for supply chain resiliency and digital transformation. And as stakeholders want to avoid the problems they’ve seen this year, they’re now leading the charge for operational upgrades.
That support is a huge benefit for procurement professionals seeking to shore up operations and looking to build a strong foundation for next year and beyond. It has always been difficult to scale up procurement and supply chain operations if there’s no new technology and no support from senior management.
Because of COVID-19, business leaders are waking up to the fact that disruption is inevitable and that even everyday problems in the supply chain can have severe repercussions. Veterans in the supply chain industry know this, of course, but it hasn’t always been easy to persuade the top management to ditch manual processes and old tactics — and invest in technology and strategies to ensure resiliency.
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Typical improvements of supply chains historically focused on efficiency, like increasing operational speed, reducing costs and eliminating manual touches. Those remain vital, but to build resiliency today, businesses must deploy a one-two punch: a strong supply chain network design and smart use of technology.
You have to build a supply chain backbone that’s strong, flexible — and capable of continued optimization.
To learn more about ensuring resiliency, we talked with the specialists at Bristlecone, a provider of services for supply chain transformation and product engineering. We wanted their insights because they’re on the ground helping reduce workloads, cutting the time to approve suppliers, adding visibility into spend and improving a full suite of source-to-pay (S2P) processes.
Bristlecone shared five ways you can improve supply chain resiliency as you look ahead to 2021 — because even if you’ve weathered the coronavirus disruption so far, you’ll need to rebuild your supply chain and procurement functions for future problems, even if they’re not as bad as this pandemic.
Five Tips to Build Supply Chain Resiliency
With the C-suite now ready to act, let’s look at five ways to build supply chain resiliency.
- Fine-tune your disaster response plan. Don’t file your COVID-19 response plan under “things we hope never happen again” just yet — even if we leave the worst of it behind in 2020. Take the lessons you have learned and use them to strengthen your action plan. Look at your supply chain through the lens of these three priorities:
- How are you going to ensure continuity of production and fulfillment when faced with supply and demand issues? Do you have an alternate supplier base standing by?
- Are you in a good position to maintain the flow of information? Are you embracing digital channels, collaboration technologies and paperless workflows?
- How do you foster employee health and well-being? Are there redundancies in place to keep the business running when labor is in short supply? Can you deliver contactless service?
- Get to know your suppliers. This year, with COVID-19, many companies learned a hard lesson in supplier diversification and why it’s critical to know your suppliers, including Tier 2 and Tier 3 suppliers. One 2020 study found that 162 of the Fortune 1000 had one or more Tier 1 suppliers in Wuhan, China, the city where coronavirus hit first. But when you include the Fortune 1000’s Tier 2 suppliers in the area, that number jumps to a whopping 938. With the right technology, you can gain a deeper understanding of your suppliers and communicate and collaborate more effectively with them.
- Take a close look at your sourcing strategy. As you act on what you learn about your suppliers and begin to re-analyze your sourcing needs, you may consider a balanced decoupling strategy. Companies are moving toward sourcing closer to home but recognize they can still benefit from global sourcing for commoditized products. Find the right balance between globalization and localization. What balance gives you the best resiliency?
- Bring your customers into your supply chain. Today’s customers want to be in the know. They want real-time updates, from order to promise. They want you to know their preferences and spending patterns. They care about what you’re doing for the planet. You can protect the customer experience, even in the face of adversity, by leveraging risk-management technologies to identify and contextualize potential risks. AI and machine learning algorithms can help you monitor local and global events, modeling tools and predictive analytics enable you to understand the impact of demand volatility and supply shortages, and IoT and track-and-trace solutions provide real-time insights.
- Visibility. Visibility. This year, a lot of talk focuses on supply chain visibility. Design and technology together make visibility possible — eliminating data siloes and bottlenecks, building track-and-trace capabilities and AI-enabled cognitive insights into your supply chain. But it’s not enough to just have visibility. It’s how you use it that counts. Identifying risks and stopping them in their tracks. Rapidly identifying and locking in alternate suppliers to avoid disruptive demand and supply situations. Sensing change and pivoting to use it as a competitive edge. Visibility enables resilience.
On-the-Job Improvements
Bristlecone also shared a few examples of how their work in process consulting, procurement solution deployments, business services and AI-powered solutions help customers drive digital resiliency and business agility.
Resiliency in procurement transformation
Bristlecone had just reached a major milestone in the procurement transformation of one of their life sciences customers, a leader in molecular diagnostics, when COVID-19 hit. Bristlecone completed an accelerated deployment of the SAP Ariba Supply Chain Collaboration (SCC) solution. Since the customer had a solid foundation, they were in a position to embrace the disruption caused by the pandemic. They created a test that received an Emergency Use Authorization from the FDA. It became the first rapid, point-of-care and near-patient molecular test for the detection of the virus that causes COVID-19. This customer’s digital transformation has now taken them to a place of unprecedented growth and massive capacity expansion in the U.S.
Resiliency in procure-to-pay
Bristlecone helped an international scientific research organization transform its procure-to-pay (P2P) process. Because much of the process was manual and paper-based, the organization had little to no visibility into spend. Extended cycle times and over-dependency on specific buying channels were common. Bristlecone provided end-to-end digital procurement transformation capabilities, including spend analysis, roadmapping, technology implementation and change management. As a result, the customer has achieved a greater than 60% reduction in its P2P cycle time, increased automation by more than 65% and maximized rebate opportunities. New role-based dashboards and custom search capabilities deliver valuable visibility.
Resiliency in supply chain collaboration
Bristlecone transformed procurement for one of the world’s leading luxury goods companies. The procurement transformation initiative also leveraged SAP Ariba SCC and encompassed a shift away from paper processes, logistics simplification and integration of suppliers’ operations into their supply chain planning and execution in near real time. Through increased visibility into transactions and inventory stock, and the ability to provide suppliers secure access to design documents, the solution has greatly improved the company’s relationships with its strategic direct contract manufacturers and critical component suppliers. The customer also achieved a 99% reduction in time spent printing documents and sending emails, as well as a 25%-30% performance gain in the order-to-receiving process.
This Brand Studio article was written with Bristlecone.
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