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How Emergency Plans of the Future Will Prevent Supply Chain Disruption

supply chain distruption

As supply chains become more global and complex, the impact of any disruption intensifies. Supply chain disruption occurs because of changes in the environment or human factors. The COVID-19 pandemic is a significant example of supply chain disruption. McKinsey & Company surveyed 60 senior supply-chain executives from across industries and geographies in the second quarter of 2020.  According to the report, “The overwhelming majority of respondents said that the crisis had revealed weaknesses in their supply chains that they’re now working to address,” such as: 
  • 73% encountered problems in their supplier base
  • 75% faced problems with production and distribution
  • 85% of respondents struggled with inefficient digital technologies in their supply chains
Due to the fact that supply chains are becoming more global, understanding supply chains and building business continuity plans are vital skills for aspiring and current business managers.  Emergency plans of the future that include IT infrastructure, total quality management, strong business partnerships, government support, inventory visibility, use of data analytics and alternatives to raw material production will prevent supply chain disruption. 

Improvement of IT Infrastructure

Investing in IT infrastructure helps with supply chain visibility, enhances trust and cooperation among business partnerships and builds a more resilient supply chain.  Important elements of IT infrastructure include:
  • Hardware
  • Software
  • Networking components
  • An operating system
  • Data storage
Companies who invest in supply chain software improve IT infrastructure and increase supply chain resilience. IT infrastructure is increasingly vital for managing supply chains because it helps your company simplify its supply chain, eliminate unnecessary links, improve productivity and reduce spending.

Total Quality Management Model

The total quality management (TQM) model is a continual process that helps streamline supply chain management by detecting and reducing or eliminating errors.     The major components of TQM model include:
  • Job training
  • Focus on quality
  • Great leadership
  • Putting the customer first
  • Error-correction and improvement as an on-going process 
The goal of TQM is never to reduce quality or value. The TQM model differs from alternative models, because it always focuses on prevention and is customer-centered.  Due to this model focusing on prevention, companies improve their supply chain through building resilience, rather than trying to recover from problems.   

Stable, Long-Term Business Partnerships

Much like all aspects of life, success usually depends on strong relationships. Whether your supply chain includes multiple company partnerships or just one, strong business partnerships are critical to ensuring supply chain stability. Stable, long-term business partnerships help mitigate supply chain risk, ensure customer satisfaction and increase your bottom line.          Take note of these four tips to help you choose and manage sustainable business partnerships related to your supply chain:

1. Know the ins and outs of your suppliers

If your business partnerships feel the relationship is one-sided with no give-and-take, then you’ll quickly have issues. Make your business partnerships a mutually beneficial relationship by really getting to know them. Learn as much as you can about how they work, communicate, etc. to build the relationship.  

2. Pay close attention to detail

Be thorough with details when it comes to logistics. Lack of attention to detail impacts time, cost, and customer satisfaction. Your business partnerships will suffer if they have to continuously deal with repeated mistakes within the supply chain.  

3. Leverage new technology

New technology can optimize workflows and processes if you take the time to research and invest in it. As we discussed above, improving IT infrastructure is increasingly vital for managing supply chains.   

4. Prioritize value (and long-term success) over cost

Oftentimes the number one thing that affects business partnerships is the cost of a product or service. In supply chain management, it’s best to focus on total cost of ownership (TOC). TOC is the cost of a product or service plus the costs of operation. Knowing the TOC illustrates the long-term price and the benefits of being in business with your chosen supply chain partner.    

Government-Supported Flexibility

The government can play a role in supporting businesses when supply chains are disrupted with investments in infrastructure. For example, in response to the COVID-19 pandemic and its impact on semiconductor chips, the Biden administration’s infrastructure proposal included $50 billion for the semiconductor industry in the United States. This increases efforts to reduce businesses’ dependency on global purchasing in certain industries. The government can also invest in infrastructure that facilitates global trade such as ports, IT, cybersecurity efforts and more.       

Inventory Visibility

Supply chain inventory visibility is the ability to view and track inventory in real time. Inventory visibility helps businesses with accurate forecasting, resource allocation, efficiency, customer experience and more.  Every business is different, with its own unique challenges, demand cycles, and distribution channels. Therefore, it is difficult to prescribe a single solution to inventory visibility that will make sense for all businesses. Knowing this, here are options that may improve inventory visibility: 

Follow the 80/20 rule

The 80/20 rule is a guide for categorizing inventory to help increase inventory visibility. The 80/20 rule aims for about 80% of your profits to come from 20% of your current inventory. 

Invest in inventory tools

It’s time to ditch the spreadsheets. Inventory management systems or other types of inventory applications will help you keep track of inventory across your supply chain(s) automatically. 

Improve management capabilities

Supply chain management doesn’t exist in a silo. It encompasses many areas of business, from human resources to project management. Professionals who gain graduate degrees in respectable fields can help improve their management capabilities when it comes to inventory visibility.  

Leveraging Data Analytics

The current exponential growth of data is key to the changes we see in businesses leveraging data analytics. All businesses, small to large, can use data analytics to optimize performance, drive business strategy and increase the bottom line.  Data analytics is the process of analyzing raw data. Arguably, the most important way to use data analytics is to identify and anticipate supply chain issues.   Supply chains usually generate massive amounts of data. If employees can analyze this data, then you can better predict future demand. This helps a business decide what products can be decreased when they become less lucrative or understand what customer needs will be after an order.   If employees need to improve upon their abilities to analyze data, then there are plenty of online graduate business analytics programs or less time-consuming computer technology certificates available.     

Alternatives for Raw Materials Production

Limitations on raw materials can cause supply chain disruptions, especially if there’s a natural disaster that impacts the location raw materials are sourced. To offset raw material limitations, businesses can leverage alternatives, such as stocking up on raw materials when available or expediting parts. But, these alternatives might pose additional challenges—mostly in terms of costs.  For example, stocking up on raw materials ensures you’ll always have enough on hand to meet customer demand. However, you’re most likely paying for a larger warehouse space to hold the extra materials for an unknown amount of time. 

Planning is Imperative for Supply Chain Management

Many areas influence supply chain management, and ultimately emergency planning is imperative to prevent supply chain disruption.  If you’re an employee working with supply chains or you hope to be one in the future, then pursuing an online graduate education can help you be successful in this important area of business.  Montclair State University’s fully online master’s programs can be completed in as little as 26 months. These programs provide a unique learning experience that gives you the needed flexibility to keep working in your full-time career.  Four online MSU programs that are useful for supply chain operations include:  Although emergency planning won’t mitigate all the risks that come with an increasingly global supply chain, it’s still something all companies and governments should do to be as prepared as possible.  Become more prepared in handling supply chain management, and reach out to our Student Recruitment Manager in the contact form below to learn more about our graduate programs.

Contact Information


Toby Burris
Montclair State University
Student Recruitment Manager

(973) 435-0909
onlinebusiness@montclair.edu

Do you have questions about the online MBA? You may find it helpful to watch a webinar hosted by Student Recruitment Manager, Toby Burris.

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