With extended supply chains, unforeseeable disruption and volatility have become common in this global era. Therefore, it is very important for organizations to develop ability to manage such unforeseeable disruptions as climate changes, infrastructural disruptions, and social, political and economic disruptions. We assist our clients in increasing transparency & in managing global sourcing uncertainty through data visualization.
Disruption management considers building recovery capacity which typically entails creating capabilities within the organization and with supply chain partners to recover from unforeseeable disruption and volatility. These capabilities are mainly developed through investments in infrastructure and resources before they actually are needed. Initiatives in building recovery capacity would include, for example, developing a multi-skilled workforce, designing products that can use alternate components in their bills of material, designing production systems that can accommodate multiple products and real-time changes, adopting logistics strategies that provide transportation alternatives, and adopting sourcing strategies that permit transparent switching of suppliers.
However, organizations face challenges in prioritizing investments in uncertainty management because anticipation for uncertain events is difficult if not impossible. Therefore, we provide services in developing global sourcing uncertainity management dashboards to assist global sourcing managers in prioritizing investments in uncertainty management. Specifically, we assist our clients in global sourcing uncertainty management by using following step by step procedure:
Step 1: Assessing criticality of product category to the business
Using ABC Analysis, organizations first need to assess criticality of products to their business and thereby prioritize investment in building recovery ability.
Table below provides a template to assess the criticality of the product to the business and the frequency with which the product is supplied. The descriptors that can be used for criticality of product are critical (A), essential (B), and optional (C) and for frequency of supply are daily, weekly, and monthly.
Step 2: Identifying and assessing suppliers associated with critical (A) product categories
Table below provides template to characterize suppliers associated with critical (A) products. Each supplier is given a supplier number and the tier in the upstream supply network. The table also shows the status of supplier and the frequency with which the supplier provides product to the business. The descriptors that can be used for supplier status are sole supplier, main supplier, occasional supplier, and possible new supplier.
Step 3: Assessing criticality of supplier
Supplier criticality can be determined using following criterion:
Step 4: Assessing country sourcing uncertainty for upstream supply sources associated with critical (A) product categories
Table below provides template for assessing country sourcing uncertainty. Sourcing uncertainty from supplier’s country due to issues such as climate changes, infrastructural, and social, political and economic can be determined using following criterion:
Step 5: Prioritizing investment in global sourcing uncertainty management
Finally, firms can prioritize investment in uncertainty management by considering criticality of suppliers and country sourcing uncertainty simultaneously.
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