Deloitte & Manufacturers Alliance on supply chain disruption
Supply chain disruptions have forced manufacturers to look at the vulnerabilities in their network. In order to protect themselves against further disturbances, new methods must be considered for supply chain assurance.
Deloitte partnered with the Manufacturers Alliance in a study ‘Meeting the Challenge of
Supply Chain Disruption’, where over 200 manufacturing executives were asked questions about the impact of supply chain disruptions on the manufacturing sector and what manufacturers plan to do.
This is our summary and you can read the full report here.
Key supply chain risk mitigation strategies manufacturers are implementing
Manufacturers are pursuing several key risk mitigation strategies to face these concerns and minimise the disruption to their business:
- 83% said strengthening existing relationships
- 81% said pursuing multiple and regionally diverse suppliers
- 76% said they would use digital supply chain tools for clearer insight into their supply chain
- 65% said they would move away from just in time (JIT) methodology and use just in case (JIC)
Just in time methodology is when products are received from suppliers only when they are needed.
Just in case is producing or purchasing stock with buffer stock included.
The manufacturers who said that they would strengthen existing supplier relationships in order to increase resilience, gave several ideas as to how they would do this:
- Work closely with suppliers to help them apply metrics to their Tier 2, 3, 4 suppliers
- Agree on mutually beneficial KPIs, so that every party knows what to expect
- Boost transparency and assurance by helping suppliers to maintain data
- Give new employees training on relationship management
Just in time manufacturing on the decline
The results have shown that to help manage the growing material costs and worker shortages, manufacturing executives are moving away from just-in-time approaches.
Just in case manufacturing will mean that manufacturers pay more for space in which they can store buffer items.
Yet in order to manage global challenges, supply chain leaders must be ready and well- equipped to walk the tightrope balance between resilience and efficiency. Strengthening existing relationships will be the surest way to ensure this.
- Manufacturers struggle to keep supply chains resilient - BCGProcurement & Supply Chain
- Reducing Scope 3 emissions with Jeff Dewing, Cloudfm CEOProcurement & Supply Chain
- Accrol Group’s Oceans on paper manufacturing & supply chainsProcurement & Supply Chain
- The pros and cons of reshoring & modern manufacturingProcurement & Supply Chain