The Five Approaches to Mitigating Risk While Designing Your Supply Chain Network
Find the Right Direction, Balanced Scope, and Level of Change
In a recent Gartner Globalization Survey, 74% of survey respondents have implemented changes to the number of locations in their supply chains, with an additional 24% introducing alterations to the inventory or buffer capacity in the past two years. These changes were primarily driven by three overriding factors: enhancing regional and local resilience, cutting operational costs, and meeting sustainability goals. In light of these emerging trends, supply chain leaders must identify and operationalize an appropriate network design approach before commencing actual modeling.
Analyzing the potential strengths and weakness of a variety of approaches - directional rough-and-ready analysis, structural network design as a one-off activity, network design as managed analytics service with a provider, network design as a transitional service-provider-led activity, network design as part of an in-house analytics competency - is key for understanding how best to make sound strategic decisions based on scope and scale initiatives. Furthermore, given the ever-changing geopolitical landscape and accompanying environmental concerns, regular review cycles are increasingly necessary for those who wish to efficiently plan for multiple scenarios using an analytical approach.
In conclusion, supply chain leaders must be proactive in their approach to network design. By taking the time to analyze and evaluate different potential approaches for creating an efficient and resilient supply chain, businesses can ensure that they are prepared for any possible scenario now or in the future. Furthermore, regular review cycles should be implemented into business strategy moving forward; this will help them stay ahead of changes in the geopolitical landscape and environmental concerns while continuing to optimize their operations cost-effectively. Finally, with the right network design strategies set up strategically, organizations can have confidence knowing they’re ready for whatever comes next.
If you understand the importance of mitigating risk in your supply chain network design but are unsure where to start or want a fresh perspective on an area leaving you vulnerable, reach out to our team at Critical Risk Solution. We can help ensure that you have considered every aspect of your network and that any weak or at-risk areas are resolved.
