Supply chain is a complicated beast, and we can’t afford to skimp on the details (e.g. timeliness, quality, logistics, etc.) in our business operations. Despite the fact that the term is often used interchangeably with “dispatch”, it has a very different meaning and tends to be more about planning for delivery than about getting goods from one point to another on a defined schedule.
The supply chain works like this: each stage in the process of producing goods requires labor and materials which are sourced from different suppliers. In order to satisfy every customer requirement and get goods out of the warehouse to their destination on time, these suppliers must be able to deliver quickly.
This means that orders need to be prioritized by value and delivered according to the appropriate timeliness standards defined in each order (or contract). If you don’t prioritize your orders by urgency and deliver within a certain time frame, your customers will never get their goods delivered on time!
The importance of a defined schedule
The best prescription for delays is to create a schedule, one that is as defined as possible, so that one could predict the timing of shipments to a given destination and allocate resources accordingly.
For example, in the food industry, a single batch of shrimp might ship from China via two ports: one in Southeast Asia and one in India. The shipment might take five days to arrive at its destination in Singapore, and then another three days to arrive in India. In addition, a portion of the shipment might be held up at the port of origin until the receipt of cargo manifests and customs clearance procedures are completed. A further delay might occur when first-class or express services must be booked, which there isn’t enough capacity at the port to handle or pay for. Delays can also occur by design because demand varies from week-to-week or month-to-month; you know that your customer will need more product than usual during peak demand periods, but you don’t know what those peak periods will be.
However, if you have a fixed schedule — say that your next order of widgets will ship on December 1st — then it’s much easier to allocate resources correctly and predict when reasonable quantities might be available for delivery by December 31st.
Types of disruptions that can occur
The logistics industry has been plagued by complexity and regulations for a long time. When it comes to supply chain disruption, there are three main types: A) Risks in the supply chain that do not impact the business; B) Risks in the supply chain that impact the business; C) Complexity within the supply chain that impacts both.
The supply chain, from raw materials to products to end customers, is the backbone of any successful business. It’s a finite and complex system that is difficult to predict and manage. Predictability has, in fact, been a very important driver of success in the industry since time immemorial. This is because supply chain isn’t just about moving goods from one place to another on a defined timetable; it’s also about moving goods on an unpredictable timetable.
So here are several ways that the supply chain can fall prey to disruptions:
1) Shipment errors – shipments can be lost or diverted by unexpected weather or shipping delays. In this case, timing matters more than anything else. So what happens when there is a sudden increase in demand (e.g., for a new product)? There is little time for the risk managers or risk assessors at fulfillment centers to react and respond to such an unforeseen spike in demand before an urgent shipment runs out of stock that could lead to massive price increases for customers and higher input costs for suppliers – both of which could have disastrous consequences for the company’s bottom line.
2) Warehousing disruptions – As production moves from one warehouse or facility to another within the same region, warehouses become increasingly complex as physical space becomes increasingly constrained. For example, inventories can be moved by truck across different regions, elevators can be used instead of workers walking up and down stairs as they move materials around warehouses and back into inventory bins, offices may also find themselves being relocated between different facilities within their region with no real coordination among regional partners operating in proximity with one another when doing so. Defects then become more likely as parts get moved between warehouses over time as they are frequently reused due to modularity improvements made by manufacturers over time as well as reusing existing parts when possible (e.g., new tires).
3) Logistics disruptions – Distribution hubs become physically congested due to rising supply chains (elevators may not work with trucks carrying products!). In this case too timing matters more than anything else: Ideally all suppliers would have access to the same low-cost transportation network so they could move their raw materials around efficiently without having them stop suddenly every few miles; meanwhile transportation costs are often fixed per shipment so there isn’t much room for error if your supplier unexpectedly decides not take part in your
The future of the supply chain
The supply chain is the backbone of business. Without it, business would grind to a halt. In fact, if your company depends on the entry of raw materials into your store or warehouse in a timely manner, you’re an easy target for hackers.
The forces that lead to supply chain success are not always straightforward. The main driver is speed of delivery (which can be measured in minutes). But it also has to do with the timeliness of suppliers: if they deliver late, you lose out on a good deal; if they deliver early, you lose out on making money at all.
To truly define your company’s supply chain strategy and implement it into practice, one needs to hold a thorough analysis of their current relationship with suppliers. In some companies, this may take months or years; in others, even decades — no matter how long it takes. One thing that is certain though: this analysis should be done far earlier than when the relationship between supplier and customer first begins. It should happen before any new products are introduced or orders are placed (early enough so that both sides have time to adjust). Otherwise, there is a risk that a supplier will simply walk away from any deal as soon as their vendor account balance grows too large…