You’ve likely heard that before, but preparedness can mean a lot of different things. What’s enough preparation when bottom-line results are at risk? Obviously, every company needs to understand their risk threshold and plan accordingly, but in our experience working with retailers across the globe, there are three core areas of preparedness that – if done well – can get a company through any supply chain disaster.
Collaborate with suppliers and partners.
In a major supply chain crisis or disruption, nothing is going to be fixed in a vacuum. The sheer number of different parties involved and impacted means that any problem needs to be solved jointly. Fast, transparent communications between partners will speed recovery of any supply chain disaster. The key is to have a platform and process in place to allow for a high level of collaboration. However, retailers often keep supplier, sourcing, logistics, etc., information in many different places with various people owning different relationships. By centralizing partner information and providing a space for open, traceable and validated communications, retailers and partners can see the big picture and work together more efficiently to solve problems.
Really know the outcomes of ‘what if?’
If the key to handing any crisis is being prepared, it’s best to know what’s possible. By applying a ‘what-if’ approach to the supply chain and using tools like the Bamboo Rose’s cost simulation software, retailers can see the accurate landing cost estimates on any possible contingency, allowing them to predict, control and manage their risk by running plausible scenarios. With this level of insight and preparedness, retailers can see both the detailed and high-level impacts of various situations on their supply chains and make better decisions in the event of a crisis.
Have contingency plans.
If you’re taking a ‘what-if’ approach and running the numbers, the natural next step is to create plan b, c, d, etc.Have a supplier plant failure in Thailand? Quickly re-route the order to redundant suppliers in Malaysia who have capacity. Another way this ‘what-if’ approach can support contingency plans is by identifying any holes or weaknesses in your supplier base. By knowing where supply chain weak points exist, retailers can preemptively fix issues before a full-blown disaster occurs.
Crises in supply chains will happen – it’s only a matter of time, but retailers can control the extent of bottom line impact from these disruptions by employing resources to help plan and prepare for the worst. By understanding the risks and taking a realistic view of your supply chain, you’ll be better prepared and will recover faster when disruption strikes.
Want to learn more about what-if costing measures and tools? Download our whitepaper, “Mitigating retail risk and uncertainty through what-if, any-market costing.”