The electronics industry experienced major problems after natural disasters affected production in 2011. The impacts of these incidents are still felt today, as supply chains inch their way back to normalcy and stabilization.
Still, there is a positive side effect of these occasions, as they offer supply chain managers unique opportunities to look back at past mistakes and improve risk management policies to ensure similar incidents aren't as devastating in the future, according to an EBN Online report.
Limited sourcing habits, for example, are likely to fall out of favor in the years to come. In other words, supply chain managers won't be too heavily reliant on one original equipment manufacturer. Instead, businesses will diversify their options to improve their disaster recovery plans, the report stated. By having more than one organization to turn to in the event of an emergency, supply chain managers can be sure that their company will continue operating, even if below its standard pace, the news source said.
Also, organizations will also focus more on risk management concerning inventory, EBN Online noted. Two major areas of this new strategy will include analyzing return on investment and day-to-day costs.
According to an IndustryWeek report, visibility is an important aspect in helping determine ROI. This will assist supply chain managers see end-to-end processes and determine what sections of the supply chain need improvement and where assets can be reallocated. Visibility also gives decision-makers the ability to quickly identify problems and make adjustments throughout the order lifecycle in order to resolve problems more effectively.
Supply chain visibility in addition to having multiple suppliers is vital for global businesses today, as it allows they allow executives to track and monitor the progress of all sections of the supply chain. Additionally, visibility technologies allow decision-makers to assign role-based alerts, enabling them to manage exceptions to otherwise acceptable processes, IndustryWeek said.
Day-to-day cost analytics will also be an important function for supply chains in 2012. This process will be easier when businesses shift to act more as demand-driven organizations, according to another EBN Online report.
Supply chains driven by demand, rather than unreliable forecasts, will allow the company to cut waste. As a result, businesses will be able to analyze their everyday costs more efficiently, noting what areas of the supply chain needs improvement and what sections are performing successfully.