Velocity of response and proactivity in risk management are key to meeting supply chain challenges and creating value, says Rajesh Kalidindi, founder and chief executive officer of LevaData.
The unprecedented challenges of the last couple of years have presented opportunity for supply chain organizations to create value, Kalidindi says. Successful ones have managed to achieve resiliency and secure supply ahead of everyone. They have moved faster or figured out ways to lock down pricing to avoid significant inflation.
There are three elements in successfully managing risk, Kalidindi says. One is rapid response. But “understanding” an event has occurred before competitors do doesn’t necessarily give advantage. “The real advantage comes in what you do post-understanding.” Some companies took weeks longer to respond to recent challenges.
Secondly, successful companies already understood where their top set of risks were, and were proactively managing those either at multiple sites or multiple nodes in their operation, he says.
The last piece some companies have really done well has been in product design. “They're able to influence engineering proactively in terms of designing for supply chain risk, choosing the right parts, the right suppliers, the right sites to make the product.”
In Kalidindi’s view, companies can no longer have a cadence-based engagement with their supply base. “Gone are those days where you can decide when you need to act. In today's world, you better be ready for the rollercoaster at any point in time, whether it’s going up or down. And so having the team, the technology and the strategy in place to manage challenges becomes super critical for success.”
Kalidindi acknowledges that one may not be able to save cost when faced with a risk situation, but you’re likely to reduce the impact of a cost increase and do so better than the competition.
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