Kearney research touts the benefits of a supply chain stress test

” As the COVID-19 pandemic abruptly shuttered factories, offices, and centers worldwide, lots of companies found they had actually restricted methods to deal with the sudden shock to their local and global supply chains,” Kearney noted. “As a direct outcome, they sustained gut-wrenching losses and face continuous operational unpredictability.”

With that as a background, Kearney has developed a strength tension test, for supply chains, as C-level supply chain executives are beginning to look at their operations with a focus on increasing strength and dexterity.

The durability tension test is consisted of carriers operations throughout eight dimensions, in order to identify where carriers are most vulnerable to future crises and unanticipated shifts. The dimensions include: location; preparation; providers; inbound transportation; manufacturing; outgoing circulation; item portfolio and platform; and financial/working capital.

New research just recently launched by Chicago-based global management consulting company Kearney, entitled “Strategic options to build resilience,” takes an in-depth at supply chain resilience, in light of the comprehensive impact of the continuous COVID-19 pandemic on supply chains.

Suketu Gandhi, Partner and Leader for Digital Supply Chain at Kearney, offered an in-depth introduction about what shippers require to do, in order a resilient supply chain, within the context of Kearneys research.

This circumstance, the firm noted, reinforced how, in time, supply chain resilience is as important to a shippers profitability, as supply chain cost and performance. And that has in turn, resulted in approaching resilience outside of the lens of what Kearney called conventional disaster-scenario preparation. What is needed, it said, is having the capability and capacity to be able to rapidly bend, or repurpose, assets, throughout an extended supply chain to be able to react to unanticipated supply shocks, such as trade wars, major weather condition occasions, or long-term shifts in need.

Logistics Management (LM): What do carriers require to do, or know, in order to operate durable supply chains?

For providers, these durability principles still apply, but their application specifies to the nature of supplying logistics services. For example, a providers network includes any sub-carrier owner-operators it uses as a part of its network. Having presence here that is incorporated with the planning operations is crucial to growing in spite of external shocks that might involve volume spikes and shifting customer requirements.

To be agile and flexible in supplying the demand, shippers need to begin by having end-to-end visibility into all aspects of the supply chain from who supplies your providers all the way to where and just how much product you have at any time.

For carriers, constraining points would be along their possession network, dependence on crucial possession carriers, and general coverage from a geographic viewpoint. For each of these locations, carriers require (1) visibility into possessions, (2) capability to scale up assets (including additional pre-qualified sub-carriers), and (3) a flexible innovation infrastructure that can flawlessly operate across the preparation department, owned possessions, and momentarily contracted sub-carriers.

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To accomplish this, we gauge the strength of the businesss supply chain operations across 8 dimensions to determine where it is most susceptible to prospective shifts and future crises. Resilience needs to be analyzed from an end-to-end supply chain view, not simply in seclusion for each specific measurement.

Jeff Berman, Group News Editor.

This scenario, the company noted, strengthened how, over time, supply chain durability is as vital to a shippers success, as supply chain cost and performance. What is required, it said, is having the ability and capacity to be able to rapidly bend, or repurpose, possessions, throughout an extended supply chain to be able to respond to unanticipated supply shocks, such as trade wars, major weather events, or long-term shifts in demand.

Gandhi: The Resilience Stress Test we have actually established at Kearney uncovers the tactical strengths and vulnerabilities of a businesss supply chain to help identify and prioritize the most engaging chances to make it more durable and nimble. To achieve this, we gauge the durability of the companys supply chain operations across eight dimensions to determine where it is most susceptible to possible shifts and future crises. Durability needs to be examined from an end-to-end supply chain view, not just in seclusion for each specific measurement.

Suketu Gandhi: A durable supply chain is one that would continue to run in spite of external shocks to meet volume spikes, adjust item offerings, react to direct shifts, repurpose capability and prepare for disturbances while knowing the complete implications and tradeoffs in between cost, speed, and performance to market.

Gandhi: Shippers ought to comprehend the constraining points along the supply chain, reliance on vital elements, minimal supplier options, what alternatives remain in location if any, whether processes or specs are over-engineered, how much presence and control you have on logistics, to enhance versatility when needed and scalability from an end to end supply chain stand point.

Jeff Berman is Group News Editor for.
Logistics Management,.
Modern Materials Handling, and.
Supply Chain Management Review. Jeff lives and works in Cape Elizabeth, Maine, where he covers all elements of the supply chain, logistics, freight transportation, and materials managing sectors on a daily basis.
Contact Jeff Berman.

LM: How particularly does the resilience stress test gauge durability of carrier operations throughout the 8 measurements cited in the report? How should the resilience scores of the report be viewed?

LM: What steps should carriers require to, as the report states, “have the ability and capability to quickly bend or repurpose possessions throughout their supply chains in action to unanticipated supply shocks?”