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Home » Blogs » Think Tank » Three Good Arguments for a Flexible Supply Chain

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Global Trade Management / Sourcing/Procurement/SRM / Supply Chain Planning & Optimization / Supply Chain Security & Risk Mgmt

Three Good Arguments for a Flexible Supply Chain

Three Good Arguments for a Flexible Supply Chain
October 25, 2019
Steve Mitchell, SCB Contributor

Supply-chain management is a significant area of business that, when done well, can make all processes run much more smoothly. The problem with many companies’ efforts is that they stick too rigidly to a system of operation that they’ve been committed to for years.

This isn’t to say that those companies don’t run efficiently. Still, a flexible approach is the best way to manage cash flow, without missing out on opportunities to grow the business. Here are three key benefits that come with a flexible supply chain.

Simplification. An aspect of supply chains that’s often mismanaged is the number of suppliers used. While it’s always shrewd to seek good deals, too much shopping around and getting tied into contracts with multiple suppliers comes with significant risks that can outweigh initial cost savings.

The use of multiple suppliers puts a supply chain at higher risk of a security breach, holdups, procurement issues, data mixups and regulation failures. Companies are simply trying to spin too many plates, and when they focus on one supplier to resolve one issue, another is likely to experience problems while they’re not paying attention.

Moreover, having multiple suppliers means more people with access to sensitive data, and additional vulnerable links where that data could be accessed by an outside party.

A better approach is to use a single supplier, and that entity should be a partner who works to pre-emptively safeguard against issues with procurement and holdups. This single partner becomes the sole point of contact for any issues that arise within the supply chain, whether they are administrative-, supply- or compliance-related.

Readiness for change. The electronics component industry, as with all technical industries, is at the forefront of change and innovation. When new technology is introduced that makes working processes more streamlined and efficient, it’s important to be prepared to adopt these technologies to avoid being left behind by competitors.

One of the key pieces of tech currently on people’s minds when it comes to supply chains is artificial intelligence. AI’s current form is limited, but one can already forecast the uses it will have once it becomes more advanced. These include gathering comprehensive data, performing predictive analytics, and undertaking a range of administrative tasks that are susceptible to human error, and take attention away from strategic decision-making.

In a tech-based industry, any day could bring with it an advancement that completely revolutionizes how we do business, so it’s essential to not be stuck rigidly in one way of working.

Protection against threats. Unfortunately, as helpful tech advances, so do the methods and technology used by those attempting to breach security. This threat is double-edged, as outmoded practices and technologies are easier to breach, and emerging technologies are also vulnerable due to teething problems that can be exploited. It often takes a crisis before any issues with the software are addressed.

That’s another reason why it’s important to remain flexible in supply-chain management. Long-time systems and suppliers can fall victim to a security breach. Similarly, utilizing new technology or software in early developmental stages, without proper training, can put a company at risk. Companies should be pioneering new technology to improve efficiency, but they need to be prepared to make changes if problems arise.

A flexible approach is the best way to take advantage of any new advances that can boost your working processes, while protecting against the stress and potential damage of a security breach. Committing to an overly complicated supply chain, without being open to change or improvement, will only companies up for a fall somewhere down the line.

Steve Mitchell is sales director at Delta Impact, a provider of supply-chain systems and services to OEMs and CEMs.

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