The Impact of Supply Chain Disruption
and How a Transportation Manager Mitigates Your Risk
Supply Chain Logistics Are Always Evolving
Businesses everywhere are feeling the effects of supply chain disruptions, and sudden, catastrophic interruptions can be felt months and even years after the immediate events are over.
Take 2020 as an example. Manufacturing businesses everywhere were forced to reduce capacity or shut down completely until they found a way to keep their employees safe during the COVID-19 pandemic. They struggled to meet customer expectations, and logistics companies struggled with new guidelines and a reduced workforce.
Current trends in freight and shipping industries have meant keeping a lean inventory. The industry describes these supply chains as “brittle” or “taut.” When a pandemic shuts doors and makes traditional delivery next to impossible, it means consumers either have to wait for products or not receive them at all. The recent months have forced shippers to re-examine how supply chains work. They realize that logistics are the lifeblood of business.
Supply chain disruptions are no new thing, but as economies grow to a worldwide scale, a disruption on one side of the globe can be felt on the opposite end and destroy a fragile global supply chain.
This blog takes a look at how managed transportation services assess an organization’s supply chain for vulnerabilities and work to mitigate these risks through long-term strategies that make supply chains more flexible.
What Is a Supply Chain Vulnerability Assessment?
Any process works perfectly in a vacuum, but when product delivery depends on each process in a supply chain working perfectly, reality usually has other plans. A vulnerability assessment is designed to identify the parts of your supply chain that are vulnerable or weak through real-world events, so you can develop controls to handle any contingency.
- Document lists of materials – Supply chains typically rely on multiple chains of materials. An assessment lists these materials and any approved alternatives.
- Review existing controls – A risk assessment looks at the processes that govern how you get materials from suppliers. It assesses how easy they are to repeat, the most likely threats to each, and what plans are in place to avoid shortages or delays.
- Compare the cost of stockpiling inventory – Too much inventory at one location adds to costs, but a vulnerability analysis takes a hard look at these optimal inventory levels and may provide the evidence needed to increase them compared to the cost of potential lost business.
The result of a vulnerability assessment is a report that scores materials and identifies those that need additional controls. These grades can range from immaterial risks to high-profile materials that may be difficult or expensive to source elsewhere.
How Managed Transportation Providers Help You Deliver Your Products When and Where They Are Needed
Once you understand where and how you’re vulnerable, the next step is to do something about it. Vulnerable supply chains pose a threat to any operation, but the reality is that many companies do little to plan for them or minimize their risk. Here’s how a managed transportation provider transforms your vulnerabilities into strengths:
Implement Supply Chain Analytics That Make the Most of Business Intelligence
Logistics is all about making strong, data-driven decisions, and managed transportation providers like Sheer help you harmonize data, harness the power of AI, and deploy planning tools that help you manage risk.
Process Redesign and Optimization
Vulnerability assessments identify issues; process redesign eliminates these issues through improved operational functionality. This is where an experienced managed transportation provider can really show their value by prioritizing improvement through process analysis and process modeling. These improvements take your unique supply chain needs into account and assess the impact process changes have on cost and the bottom dollar at the same time.
Transportation Management Software That Encompasses Your Entire Enterprise
Many vulnerabilities can be eliminated by replacing old and outdated ways of reporting and communicating. Modern transportation management systems (TMS) increase real-time visibility into your critical supply chain processes, allowing you to quickly respond to delays and issues. If a supply chain issue looks to have far-reaching implications, TMS also provides ways to communicate these delays to the customer so they can make adjustments on their end sooner.
Test and Update Controls
Factors such as new government regulations or the loss of a supplier increase risk and are the catalyst for regular re-assessments and updates. Managed transportation providers have this built into the process, meaning periodic and event-driven re-assessments preserve efficiency and reduce costs.
The Rest of 2021 Will Be Challenging—Don’t Face It Alone
A supply chain is a network of people, places, processes, and entities that move a product from raw materials to the consumer. When it’s working perfectly, it’s easy to take it for granted. Some are very simple, some have many moving parts, but what all supply chains have in common is they’re vulnerable to delays and inefficiencies. Any crisis, no matter how minor it may seem, can disrupt the process, and it doesn’t matter where the disruption occurs.
The best and most logical way to prepare your business for supply chain disruption is by partnering with a dedicated logistics expert. From planning to procurement, Sheer Logistics helps you execute along every link of your supply chain. We step in to help when disruptions happen, whether they’re temporary issues or longer-term setbacks. But more importantly, we work with you to analyze where you’re vulnerable and develop strategies to mitigate risk.
Our mission is to build trust, use our brain power, and get to the root cause of your supply chain issues so you’re left with an efficient, cost-effective process that can handle adversity. If you’re worried about how your supply chain will stand up against the next pandemic, resource shortage, or supplier loss, call Sheer Logistics today. Our industry experts are standing by to help.
