Build a Resilient Supply Chain
Fully managing supply chain risk across the entire product lifecycle involves early planning, continuous measurement, and a balance of both proactive and reactive strategies.
Proactive risk management involves understanding where components are derived from, assessing their potential risks, and considering alternate source selections. Having the ability to react quickly in the case of unforeseen instances is essential for a resilient supply chain. Historically, supply chain performance was measured in terms of on-time delivery and quality. However, issues with delivery or quality only appear after the adverse event has already occurred. Mitigating these issues requires shifting to a proactive approach. Manufacturers can use predictive analytics to measure the elements that cause risk (leading to delivery delays or quality issues) and develop metrics around those elements. For instance, if a part is sole-sourced from a supplier that only has one manufacturing facility, that is a multiplier of risk. If there’s an issue at that facility, they can’t transfer the production to another location. A proactive approach to understanding where potential risk lies will help OEMs to understand, monitor, and mitigate the elements that cause such a stacking effect. You also need to have a nimble supply chain to manage the reactionary effects. By mapping out your supply base, you can quickly look and see where you’re potentially exposed in the supply chain. Picking the right suppliers, finding alternates—and developing the means to shift between them—provides that balance between proactive and reactive sides.