As supply chain operations grow more complex, they become more vulnerable to costly performance and service disruptions. A simple inventory count error at one end could result in delays and downtime at the other, as warehouse managers wait for the proper materials and shipments to arrive. The MIT Forum for Supply Chain Innovation recently conducted a joint study with PricewaterhouseCoopers investigating the measures taken by manufacturers and other organizations to reduce risks along the supply chain and mitigate damage caused by costly disruptions, Supply Management reported. Researchers found that implementing a business continuity plan and better managing inventory control efforts were among the solutions that were most readily available to these companies.
"Our survey indicates supply chain disruptions have a significant impact on company business and financial performance, and companies that invest in supply chain flexibility are more resilient to disruption than mature companies that don't," MIT Forum founder David Simchi-Levi stated, according to the news source.
Researchers identified some key guiding principles to help businesses better address potential risks within their supply chain operations, most notably that companies that were both highly capable in regard to risk management and supply chain operations were the most likely to withstand a disruption with a minimal amount of damage to the enterprise.
Spend Matters' Jason Busch recently argued that a major component of an effective supply chain risk management endeavor was to improve the operational decision making process. Failing to make timely inventory orders, for instance, may result in shortages down the line. In order to better inform critical business decisions, manufacturers will need to have a comprehensive overview of their entire enterprise to understand how relatively minor choices could produce a ripple effect across the supply chain. With robust supply chain management software, officials can monitor various aspects of the business, including inventory, loading and shipping. This way, manufacturers can have the most accurate, up-to-date information available to them when making important operational decisions.