What to Do about Your Supply Chain Problems

January 22, 2024 | by CBS Team

In recent years, supply chain resiliency has become a critical focus for businesses across industries. At CBS we were seeing supply chain challenges well before the COVID disruption of 2020.   

In fact, many of our clients in Aerospace were experiencing significant shortages in castings, bearings, and several other basic components required to support end item deliveries. More recently, disruptions caused by natural disasters, geopolitical events, and the ongoing COVID-19 pandemic have highlighted the vulnerabilities that exist within global supply chains. 

As a result, organizations are reevaluating their strategies to build resilience and mitigate potential risks.    

As CBS continues to work with the industry to mitigate the risk, here are some of the key trends shaping supply chain resiliency in 2024.

Diversification: Many companies are diversifying their supplier networks to reduce dependency on a single region or vendor. This not only helps mitigate risks associated with localized disruptions but also provides an opportunity to tap into emerging markets and leverage competitive advantages. Diversification needs to be done with a longer-term strategy in mind and when done in this manner can provide a powerful and effective long-term solution.

Digitalization and Automation: Technology plays a vital role in enhancing supply chain resiliency. Businesses are investing in digital tools such as artificial intelligence (AI), machine learning, and digital integration to gain better visibility and traceability across their supply chains. Automation of key processes, including demand forecasting, inventory management, and logistics, allows for quicker response times during crises.

Robust Risk Management: Organizations are employing sophisticated risk management strategies to identify and assess potential disruptions proactively. This involves scenario planning, conducting regular risk assessments, and establishing contingency plans. The goal is to minimize the impact of disruptions and ensure the availability of critical resources. Most supply chain organizations only review financial risks, which falls short of the more comprehensive assessments that are required in today’s environment.  

Supplier Relationship Management: Strengthening relationships with suppliers is crucial for building supply chain resilience. Collaboration, open communication, and shared data enable better coordination and responsiveness when faced with disruptions. As a result, companies are increasingly engaging with suppliers as strategic partners rather than mere vendors.

Reshoring and Nearshoring: In light of recent disruptions, some companies are reevaluating their global supply chain footprint. Reshoring (bringing production back to the home country) and nearshoring (establishing manufacturing facilities closer to the home market) are gaining traction. This allows for shorter lead times, better quality control, and increased agility.  This trend will not only mitigate the disruptions in the supply chain but also support an improvement of speed and agility in supporting changing customer needs and demands.

Sustainability and Ethical Practices: Supply chain resiliency is closely linked to sustainable and ethical practices. Businesses are incorporating environmental, social, and governance (ESG) considerations into their supply chain strategies. This includes reducing carbon emissions, ensuring fair labor practices, and promoting responsible sourcing.

As businesses navigate a highly complex and fast-changing global landscape, supply chain resiliency will continue to be a top priority. By embracing these trends, organizations can build robust and flexible supply chains capable of withstanding future disruptions and maintaining consistent operations.