Dealing with supply chain complexity and disruption

Supply chains are both complex and non-static– from start to finish the supply chain is a moving symphony of inputs and outputs, constantly stretching, bending and readjusting to its final goal of providing products, services, and information that add value for suppliers, distributors, customers, and other stakeholders.

Added to this complexity is the fact that in this era of globalisation, Australian businesses need to prepare for many unforeseen eventualities such as a flood, a strike, terrorism or even a change in official government policy on credit controls.

And while the size of a supply chain may vary, the issue of efficiency does not. Therefore, if the supply chain is blocked, choked or disrupted, then the entire process is in danger of shutting down.

In practical terms, supply chain disruption will be magnified the more complex a supply chain becomes.

According to supply chain expert Martin Christopher Emeritus Professor of Marketing and Logistics at Cranfield School of Management, “The more nodes and links that exist in a network then clearly the more complex it becomes.  As a result of out-sourcing both core and non-core activities many companies are today much more reliant on external suppliers of goods and services.”[1]

In fact, about 85 per cent of Australian-based companies experience a supply chain disruption at least once each year, according to the latest report of Zurich Financial Services Australia.

Moreover, the director of logistics and supply chain management programs at the University of Sydney Business School’s Institute of Transport and Logistics Studies, Associate Professor Behnam Fahimnia has noted, as companies become increasingly global, their supply chains are more reliant on offshore suppliers and thus, more exposed to global events.

Since Australia relies heavily on overseas exports where dealing with multiple nodes is unavoidable, many companies are at the risk of supply chain disruption.

One way to prevent supply chain disruption is to have complete and total visibility across the whole process.

This of course can be best achieved by using software that provides real-time visibility.

While there are many types of supply chain solutions out in the market, the best solutions are the ones that provide full end-to-end visibility.

With full end-to-end visibility, companies can monitor and manage the flows across their entire supply chain, thereby  preventing any disruption.[2]

Companies that can manage both the complexity of their supply chains through real-time visibility will also be able to increase profitability while also gaining a competitive advantage over their competition by minimising supply chain disruption.

To learn more about how to mitigate the effects of supply chain disruption, see our latest paper outlining our top five methodologies; “Five Ways to Tame the Chain.

[1] http://www.martin-christopher.info/news/keeping-lid-supply-chain-complexity

[2] https://www.researchgate.net/publication/256019231_Dealing_with_Complexity_in_the_Supply_Chain_The_Effect_of_Supply_Chain_Management_Initiatives