unforeseen vulnerabilities. However, when it comes to
building supply chain resiliency, we see most companies
taking a piecemeal approach over a longer period.
QYou stress the importance of pushing disaster planning and execution up the supply chain. Given that most
large manufacturers have hundreds of suppliers around the
world, can such resiliency be consistently achieved without
prohibitive cost?
AFor many large manufacturers, 70 to 80 percent of their product value comes from the supply base. An unforeseen issue with just one critical supplier can jeopardize a
manufacturer’s entire operation and bring production to
a standstill. For companies with complex and expansive
supply chains, I recommend starting by focusing on the 15
to 20 percent of components and parts that are critical to
continuing operations. This more limited focus will avoid
incurring high costs while still ensuring continued production through challenging periods.
Securing resiliency can be achieved
without prohibitive cost. In the past five
years, the cost of implementation has
decreased and ease-of-use for digital
tools has increased significantly. This
allows businesses to integrate cost-effective sensors and software packages to
better collaborate with suppliers as well
as enable blockchain solutions and data
analytics software that can pinpoint and
anticipate potential areas of concern.
QBeyond the obvious priority of ensuring the safety of employees,
what should a company’s to-do list be as it is developing a
disaster-response plan?
A A first step is to increase visibility into the supply chain. If your eyes are closed when disaster strikes, you’ll end
up fumbling in the dark and grasping for solutions.
This visibility requires mapping the supply chain—
developing a multi-tier perspective to better understand the
overall network. Next, manufacturers must strategically
locate any areas where potential supply chain failures might
occur. For example, a manufacturer might learn that all its
suppliers for one specific component are located in a hur-ricane-prone area. Can production survive without these
suppliers? Are there alternative suppliers that can diversify
the components’ availability and reduce risk? By answering
these questions, manufacturers can more effectively preempt disaster-related challenges.
Finally, complex supply networks require advanced dig-
ital solutions, including the ability to track material move-
ment, collaborate in real time, and integrate data across
multiple systems and locations, along with data analytics
to predict supply disruptions and identify current issues.
These tools allow for multinodal communication, enabling
instantaneous synchronization across the supply chain
and providing manufacturers with complete end-to-end
transparency. This real-time information, coupled with
unfurled supply chain maps, can allow manufacturers to
quickly recognize problems, identify solutions, and pursue
preventive actions.
Q What are the challenges in trying to build disaster plans across very long distances and many different cultures?
AIn today’s business world, distance and cultural dif- ferences no longer tend to pose significant barriers. In
fact, the global nature of business often provides significant value for companies that efficiently source through
the most cost-effective supply chain networks. As previously mentioned, digital
solutions are vital to securing supply
chains, enabling manufacturers to maintain always-on agility. These capabilities
are essential—not only for global supply
chains, but also for national and regional
supply chains.
However, companies that fail to maintain clear visibility into their supply
chains may be unaware of supply chain
issues occurring on the other side of the
globe. End manufacturers may not learn
of an issue for three or four weeks after a
disaster takes place. Without up-to-the-minute information, companies lose the ability to respond
effectively to real-time situations. By translating the physical world into the digital world, manufacturers can more
accurately capture and analyze data, building resiliency
against otherwise unpredictable situations.
Q All the planning in the world may not help in the vent of a sudden disaster and emergency, or if a storm
changes its original course. Is there any way for companies
to plan for the unforeseen, and if they can’t cover all bases,
what should they focus on?
A Securing the 15 to 20 percent of your supply chain con- taining the most critical components to your products
should be the first priority. But planning for the unforeseen
requires building a comprehensive infrastructure around
your supply chain. Digital technologies are crucial to
gaining real-time insights. If components suddenly stop in
