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Why Supply Chain Resilience Needs to Stay Top of Mind

Three years after a global reckoning for supply chain leaders, disruptions don’t show any signs of slowing down. Read part I of our series.

This is part 1 of a 3-part series on building resilience into your product lifecycle. We’ll start at the beginning, with supply chain management.

Since the pandemic impacted the global economy 3 years ago, a call for more resilient supply chains has been flooding headlines, news shows, and podcasts—rocketing this long-standing industry concern into the mainstream.

Supply chain management practices—and supply chain operations in general—are in the spotlight, particularly within industries that manufacture products and are dependent on dispersed supply chains for raw materials and distribution to customers. 

As a result, the pressure is on for businesses to find new ways to maintain the resilience and continuity of their operations.

According to a survey conducted by KPMG, “more than 6 out of 10 global organizations expect that geopolitical instability may have a detrimental impact on their supply chains in the next three years.” 

That’s three years from 2023, evidence that supply chain disruption woes don’t stem from the pandemic alone and are therefore not winding down anytime soon. There will always be another macroeconomic or macropolitical threat to global supply chains compounding everyday existing supply chain risk.

Supply chain leaders should be thinking about how to fortify their operations for the long term, instead of reacting on a case-by-case basis.

What are the primary risks to your supply chain today?

Uncertainty today comes from the unpredictability of resources and potential unrest in countries where certain suppliers exist—causing concern for supply chain process stakeholders trying to maintain their operations. 

According to KPMG, 71% of global companies identify raw material costs as the top threat to their supply chain and how these changes could potentially affect customer expectations. 

They know that consumers (and retailers) have come to rely on quicker delivery and won’t hesitate to switch brands for someone who delivers their products sooner.

That’s why 67% of companies view meeting customer demands for fast delivery as a crucial factor that will affect the arrangement and movement of their supply chains over the next 12-18 months, according to that same KPMG study. 

So what’s the upside? Crises can force change. 

The lack of materials, shrinking labor force, and global unrest are causing companies to find new pathways to suppliers and materials that they can depend on.

All of this is to say that companies are throwing energy behind two critical KPIs in today’s market — an overall renewed momentum to 1) reduce costs and 2) improve speed.

What are the 3 critical factors for assessing your supply chain resilience?

Business continuity hinges on the ability to fulfill orders, take orders, and be able to fulfill them with confidence, whether that's built to order or built to stock.

The reliability of a supplier network to provide the materials that a manufacturer needs is essential to maintain these operations and to bolster supply chain resilience. 

To have dependability and durability within the supply chain, especially during these tough times, businesses need to build redundancy and contingency capacity within their model. 

Here are three areas that supply chain leaders need to consider when assessing whether their supplier management is at risk of disrupting their business continuity.

1. Inbound supplier processes

Inbound supplier processes are a must-have capability in order to fulfill orders that businesses are taking. Businesses need to ensure that inbound supplier processes and the way that they manufacture and make their products align with sustainability initiatives and meet proper regulatory standards for safety and handling.

The inbound supplier process is a critical step that supply chain leaders must prioritize in managing vulnerabilities within their ecosystem of providers. Decision-making related to supplier selection, evaluation, and ongoing management needs to be closely scrutinized in order to identify and mitigate potential areas of risk. 

By implementing rigorous procurement and quality assurance processes, supply chain leaders can ensure that their inbound suppliers meet high standards and help minimize risks to the value chain. 

Organizations can gain a competitive advantage by ensuring consistent, high-quality product delivery to customers through an end-to-end quality focus throughout the inbound supplier process.

2. Supplier location

Businesses need to consider the reliability of suppliers who may be located in unstable parts of the world. A disruptive event, such as a natural disaster or political unrest, can severely impact your supply chain networks and lead to shortages in inventory levels. 

To mitigate these risks, supply chain leaders need to carefully evaluate the suppliers in these regions, considering factors such as their regulatory compliance and ability to withstand short-term disruptions. Building strong relationships with reliable providers in these ecosystems can provide a leg up for companies that prioritize long-term stability and sustainability in their supply chain strategies.

3. Product quality

Finally, prioritizing product quality is crucial for any business looking to gain a competitive advantage in their market. It starts with sourcing high-quality materials from trusted suppliers through a well-managed procurement process. 

However, ensuring end-to-end quality in the value chain requires a more comprehensive approach. Businesses must prioritize quality control throughout the production process, including rigorous testing and inspection, to deliver products that meet or exceed customer expectations. 

By prioritizing product quality at every stage of the value chain, businesses can create a reputation for excellence that sets them apart from competitors and builds customer loyalty over time.

Your supply chain is only as robust as your software solution

The common denominator for falling shorter in any of these 3 areas—or, most likely, all of the above—is the lack of functionality built into traditional product lifecycle platforms. When product lifecycle management (PLM) or quality management (QMS) are disconnected, or if either of them is managed with software that was designed 20 years ago—you leave your supply chain wide open to modern-day risk.

Modern solutions, such as Propel Software, can provide connectivity and automation through a Supplier Community portal on the same platform as your PLM and QMS, which can further enhance the reliability and visibility of your supply chain data. 

Connectivity via the Supplier Community can play a crucial role in mitigating supply chain disruptions by allowing for real-time communication and collaboration between partners and suppliers. And by automating certain processes and running them through SiliconExpert, an integration with Propel that includes a database of over one billion electronic components, supply chain leaders can reduce the risk of human error and improve the speed of decision-making for procurement and beyond.  

These tech-enabled processes can help break down silos by integrating data inputs across different parts of the value chain. This can enable more accurate forecasting and proactive supply chain risk management. 

By leveraging these capabilities, organizations can better manage the complexities of global supply chains, reduce vulnerabilities, and build more resilient partnerships with suppliers around the world.

Read more about the benefits of connecting your suppliers directly to your product lifecycle platform in our recent article “Supplier Communities: The New Frontier in Secure External Collaboration.”

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Greg Ladd
VP of Sales, Propel

Greg has built and scaled high-performance sales teams focused on continuous improvement and transformative growth. For more than 20 years, he has held leadership positions within a range of companies in the enterprise technology sector with a specific focus on supply chain and enterprise data management. Throughout his career, Greg has a proven track record of building successful sales teams, achieving revenue growth and overall team performance.  He is a dedicated process-oriented sales coach committed to delivering solid results and providing differentiated value to customers while ensuring client retention and loyalty.

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Greg Ladd