Supply chain resilience. You’ve heard the phrase more times in the past year than ever before. But before you dismiss “supply chain resilience” as just another industry buzzword, you must understand what it truly means and how it impacts your business. Why? Because if you want to compete and grow, it can only happen if you create a supply chain that can map supply to demand, no matter the disruption.
What is Supply Chain Resilience?
According to academic leaders in Supply Chain 24/7, resiliency is best defined as “the ability of a supply chain to both resist disruptions and recover operational capability after disruptions occur.“
Do you have a process in place now that allows your organization to resist and recover from the next disruption?
To determine this, you need to ask yourself “How reliable are my suppliers?”
If you always know what orders are headed your way, when they’ll arrive, and you don’t worry about accuracy, that would mean your suppliers are very reliable.
But if you experience issues getting enough high-quality products, are never quite sure when your orders will arrive, or you’re constantly bogged down by change orders, then your supply chain management process is not reliable. That needs to change.
The Importance of Reimagining Resilience
COVID has been a wake-up call for many industries and has forced organizations, especially food and beverage companies, to rethink and reimagine how their supply chains work.
Research from the McKinsey Global Institute showed a company can lose a year’s profit due to one significant disruption. That is huge. The impact of COVID on the supply chain was so swift, that 93% of the organizations involved in McKinsey’s research said they were already planning to take steps to increase resilience in May 2020 – just a few months after the pandemic hit.
Food and beverage suffered most during this time, unable to meet the demands of consumers and unsure what to do with food service supplies that were no longer needed by restaurants and event venues.
In a recent interview with Winsight Grocery Business, Rhonda Bassett-Spiers, CEO of iTradeNetwork, a leader in supply chain management software, discussed the surprising truth the pandemic exposed:
“In the food and beverage industry, what COVID has shown is just the lack of resilience in the supply chain. When you think about just how important food is to us, it’s rather surprising that there hasn’t been, even pre-COVID, more focus on supply-chain resilience.”
It’s not just pandemics that fuel major disruptions. Just recently a winter storm shut down 75% of the United States, and brought food shipments, specifically to Texas, to a screeching halt.
“Now is the time to build resilience into the supply chain so that future disruptions, whether they are pandemic-related, weather-related, or related to something else, are less impactful for everyone,” says Bassett-Spiers.
How to Build Resiliency
Let’s return to the question you asked yourself earlier about supplier reliability. If you can’t rely on your trading partner to provide quality items, on time and for the right price, that’s just one pain point you have to solve.
Now, think about every other hassle you experience in your order management process, from manual PO creation to phone calls to emails and faxes. To build resiliency, you need to recognize what’s holding up your process, then find a solution.
Here are two ways to increase supply chain resilience immediately:
1. Expand your network
Variety is the spice of life. It’s also what keeps your supply chain resilient and your business profitable. If you can’t consistently rely on the suppliers you have now, you must expand your network and establish new trading relationships. This allows for the flexibility you need to get the right products, at the right time, for the right price. Plus it allows you to navigate around disruptions. For example, if a grower in one region is experiencing a weather event that prevents them from fulfilling your order, you can pivot quickly to another supplier that isn’t being impacted by that event to get what you need.
iTradeMarketplace is a solution that allows you to seamlessly connect with more than 8,000 new trading partners. If you’re still a little apprehensive about using new suppliers, you can create a free account on iTradeMarketplace, and anonymously browse the network to see just how many new opportunities are available to you.
2. Embrace Technology
Face it: Growing grocers like you are not as technologically-savvy as larger retailers. That has to change for you to compete and grow.
Bassett-Spiers recently addressed the issue stating: “Many of those businesses were started as family businesses, and there’s an opportunity there for them to leverage technology to enable trading relationships. Our message to them is, it’s time to let go of the yellow stickies and the highlighters.”
But it’s not about embracing any technology; it’s about embracing the right technology. For instance, an Electronic Data Interchange, or EDI, can help you send documents back and forth electronically with partners. But EDI is an older technology that doesn’t offer collaboration, order tracking and changes, or finding new trading partners like an order management solution like iTradeOrder does.
Investing in technology that streamlines your order management process and allows for real-time collaboration and tracking in one place is key to building the resiliency you need to stay ahead of the next disruption.
Where to Begin
If you are ready to start building a resilient supply chain, iTradeNetwork has the solutions you need to make it happen faster. Contact us today to learn more.