Supply chains can be disrupted for any number of reasons. However, organizations that plan ahead and implement the right system can minimize disruptions.
Under normal circumstances, a large manufacturer in good standing has reliable contacts for material supplies. Costs are negotiated in advance for all the materials needed from the production line.
But when a pandemic or any other catastrophe surfaces, it’s time for a backup plan.
“Success of your company depends on getting your product to the market at the right time and at the right price,” Hande Meissner, Vice President of Operations at NexGen Digital, said.
Getting to the right price means taking into account a number of things, including:
- Overall bottom line
In a recent Quartz Network presentation, Meissner explains ways to achieve excellence by diversifying your suppliers.
In the last decade alone, our supply chains have weathered an earthquake and tsunami in Japan, followed by the more recent COVID pandemic.
“Two major events in one decade and we still assume our buying power can withstand these events,” Meissner said.
Meissner stresses the importance of diversifying your resources and being mindful that:
- You cannot buy what is not there
- The size of your company does not guarantee resilience
Six Degrees of Separation
Meissner applies the “six degrees of separation” theory to suppliers. You are six introductions away from a new independent distributor.
Achieving supply chain excellence means being resilient and using diversity to your advantage. Meissner explains ways to achieve this with sourcing power that is:
- Agile – functional diversity brings resilience
- Global – take advantage of global sourcing for cost benefits and increased availability
- Flexible – work with an independent distributor beyond your regular borders to increase your geographic coverage
“Excellence comes from our ability to move forward.”
Watch the full presentation, Supply Chain Excellence Through Sourcing Optimization, for more ways to optimize and reduce the risk of supply chain failure.