Pervasive Globalization and Outsourcing Expose Supply Chain Risks
Supply chain risks come in all shapes and sizes. Most people think of floods, hurricanes, geopolitical issues and other "major" events when they think of supply chain risks. But the increasing complexity of today's supply chains mean that there are literally hundreds of unplanned events happening every day. You must be equipped to deal with them in a timely and profitable way or, taken in sum, they pose a significant risk to your competitiveness in the market. The ongoing inability to deal with these issues can mean the difference between profit and loss in many cases.
- “Nearly three-quarters of companies (73 percent) believe their supply chain risk has risen since 2005; nearly the same number (71 percent) believe the financial impact of disruptions to their supply chain has also grown.”
- "Stemming the Rising Tide of Supply Chain Risks: How Risk Managers' Roles and Responsibilities Are Changing" | Marsh, Inc's Supply Chain Risk Management Practice
Unfortunately, most companies don't have effective processes and tools in place to manage day-to-day risks proactively. Most companies have spent years putting in place systems, processes and staff to run the business like clockwork, but now find themselves caught off-guard as the business more often than not, does not run like clockwork. The warning signs are declining operations performance and poor customer satisfaction that can ultimately lead to market share erosion and the proliferation of spreadsheets to really run the business.
Ask yourself what role volatility is playing in your company's inability to consistently beat the competition and hit your objectives. Chances are you'll find that it's playing a major role in all aspects of the business. Then evaluate how your company responds to change today and see if you've effectively armed your front-line decision makers that have to manage these situations with the tools they need.
Enabling Rapid Response to Supply Chain Risks
While most organizations have a centralized planning process, the reality is that the response process, by its nature, is decentralized. When things don't go according to plan, it's your front-line responders that need to be empowered to act quickly and decisively.
In order to be ready to deal with rising supply chain risks — large and small — supply chain professionals need to be armed with the right supply chain risk management tools — tools that are capable of dealing with a wide variety of supply chain issues in a timely and cost effective way.
Kinaxis® RapidResponse® is such a tool.
- RapidResponse starts by ensuring that all stakeholders have a single version of the truth of the extended supply chain, enabling them to evaluate their supply or demand liability throughout the supply chain.
- RapidResponse then provides elegantly simple to use, but powerful simulation capabilities. You can quickly analyze the impact of any supply chain risk and collaborate with others throughout the supply chain on possible course corrections. You can simulate what would happen if there were a strike that limited production capacity; what would happen if a supplier was unable to deliver; what would happen if demand suddenly spiked or fell off by 20%, etc.
- Because of the unique AlwaysOn Analytics within RapidResponse, each simulation provides immediate feedback on the implications of the specific supply chain risk, allowing your teams to quickly analyze and weigh options to deal with it.
RapidResponse uniquely meets the needs of today's supply chain risk management process — both in terms of developing the plan and developing rapid and profitable responses to plan deviations as they occur. RapidResponse supports supply chain risk management with solutions for
- operations performance monitoring and alerting,
- multi-enterprise supply chain visibility,
- inventory reduction and rationalization and
- data integrity management.