Avoiding Supply Chain Imbalance Through Collaboration

Avoiding Supply Chain Imbalance Through Collaboration

When we think of supply chain disruptions, we usually only consider the shortages that became familiar during the pandemic—back-ordered or unavailable parts, empty store shelves, long delays in shipping and fulfillment. But it seems that many companies are now experiencing the opposite, in the form of significant excess inventory.

This problem is having an impact in a variety of industries, with overall manufacturer and trade inventories in June being up 18.5% compared to the previous year, according to the U.S. Census Bureau.

Every company is different, but many appear to be experiencing inventory imbalances driven by abrupt changes in either supply or demand, or both. Managing inventory is always challenging, but the volatility of the past two years has made it especially difficult. As supplies ran short during the pandemic, many companies boosted orders to build buffer stocks. Now, with demand subsiding somewhat—or shifting to different products—some of those companies are left with too much inventory. This can lead to excessive amounts of capital being tied up in goods, along with other carrying costs for things such as storage space and insurance. And for companies focused on innovation, excess inventory increases the potential for product obsolescence, as components sit on shelves waiting to be used. 

Taming Supply Imbalance

What can companies do to reduce inventory imbalances in the future? There is no simple answer, but they can take steps such as tightening their inventory-accounting practices to gain a more timely, detailed view of the materials they and their suppliers have on hand. This can help them understand how well inventory is aligned with demand. Additionally, they can change their ordering patterns to focus on smaller, more frequent purchases; making it easier to respond quickly to changes in demand. They can also conduct assessments that proactively identify potential risks in the upstream supply chain.

More broadly, companies can re-examine just-in-time practices and look for ways to use targeted, carefully managed buffer inventory to reduce their vulnerability to shortages. Or they can consider structural changes to the supply network, including reshoring to reduce reliance on long global supply chains and bringing more suppliers into the mix to expand sourcing options.

Looking forward, effectively managing inventory imbalances in an era of “disruption as normal” will require increased visibility across larger portions of the supply chain. Here, companies can consider technologies ranging from EDI to supplier portals and cloud-based supply-chain platforms that let partners work together to understand supply and demand to optimize inventory levels.

In the end, however, the best tool for avoiding inventory imbalances will be relationships that allow partners up and down the supply chain to communicate and collaborate to identify imbalances early on. For many, this will call for new ways of working with partners to share information about risks and disruptions in production and logistics; about the design of new products; about products reaching the end of their lifecycle; and about changes in end-customer demand.

To a great extent, inventory imbalances are the result of uncertainty. Strong relationships that foster greater information-sharing will be key to cutting through that uncertainty to keep inventories at levels that will meet the needs of companies and customers alike.

Strengthen Product Supplier Partnerships to Address Current Supply Chain Dynamics

Strengthen Product Supplier Partnerships

As supply chain constraints have shifted traditional buyer-focused procurement and supply-chain systems into being more supplier-focused, some procurement experts are calling 2022 “the year of the supplier.” Businesses today are facing pressure to diversify and localize their supplier base, putting manufacturers in a stronger position.

In this new landscape, companies are increasingly adopting a supplier relationship management (SRM) approach to create better working relationships. This mindset envisions the buyer-seller dynamic as an active partnership that can bring value to your company.

When correctly implemented, SRM creates a mutually beneficial relationship where your organization and its suppliers are working together to reach common goals. It helps supply chain managers ensure safety, security, compliance, and cost savings at all stages of the process.

To adopt an effective SRM approach, four strategies suggested by operations services provider Symplr include:

  • Learning about your suppliers
  • Educating them about your organization
  • Communicating and keeping them informed about the big picture
  • Setting clear expectations and KPIs and checking on them regularly

It also makes sense that in a world where companies are highly focused on managing how customers, employees, and the general public experience their brand, they extend that focus to the supplier experience as well. In today’s supplier-focused market, some companies are going beyond SRM to practice supplier experience management (SXM), which engages suppliers through many different components like bidding, information management, communication, insights, and support.

Organizations can improve the experience they offer to suppliers by creating an SXM road map, mapping out supplier journeys through your systems, designing a supplier communication plan, and adopting new digital solutions, among other steps, according to a recent article by global management consulting firm Kearney.

Ultimately, it’s no longer sufficient for companies and product suppliers to adopt distinct buyer and seller roles. In the new supply chain environment, both must be focused on developing authentic partnerships to succeed.

Dynamic stands ready to help you with this process and serve as a true strategic partner in your supply chain’s success. We acquire products only through OEM-authorized channels. Our expertise and connections with more than 800 technology providers can help your company realize supply chain savings and plan ahead for important events including product End of Life (EOL).

Learn more about Dynamic Technology Supply Chain Management solutions.

The Supply Chain’s People Problem: What It Means for Your Business

Supply Chain’s People Problem

In a recent report, CBS News noted that at the Port of Los Angeles, incoming cargo is straining warehouse capacity.  The number of containers waiting to be shipped inland has jumped from 9,000 to 35,000, and incoming cargo ships may soon be backed up in the harbor. The cause of this disruption is not wildfires, storms, geopolitical forces, or trade barriers, but rather a lack of railroad workers to haul containers out of the port. That’s just one problem in a single location, but it illustrates the fact that labor shortages have become a major source of continuing supply chain disruptions.

Supply chain labor shortages have made headlines throughout the COVID pandemic, and they were already in evidence long before the term “the Great Resignation” was coined. While COVID clearly made labor shortages worse, it’s not the only factor driving the problem. Waves of retiring baby boomers, a lack of critical technical talent, and the new expectations of younger workers have all made it difficult to recruit and retain the right people. And the problem is not going away soon.

Gaining More Resiliency While Reducing Vulnerability

The question is what can be done about it. Much of the problem is, of course, outside of any one company’s control. Manufacturers, for example, cannot solve their suppliers’ labor problems for them. But they can work to increase visibility into their partners’ operations to identify problems early on; keep the channels of communication with partners open; expand their supplier base to reduce reliance on a limited number of partners; and build robust risk management capabilities to make supply chains more resilient and less vulnerable to the labor shortages their partners might face.

There are also internal actions companies can take. Typically, much of the supply chain is in-house and performed by a company’s employees—and that reality should prompt companies to revisit their talent strategies. A recent study from the Pew Research Center, which looked at why people quit their jobs last year, offers some insights that can inform those efforts.

Pew found that less than one-third of the people who quit their jobs last year did so for COVID-related reasons. Instead, many pointed to low pay as a top reason, cited by about two-thirds of respondents. But workers also pointed to a range of other reasons, some of which could be addressed by targeted changes to company policies. For example, child-care issues were cited by nearly half of employees with young children, which suggests that daycare programs could be an advantage in the labor market. And more than 4 out of 10 respondents cited a lack of flexibility in work hours; here, companies might consider strategies such as flex time, job-sharing, and the use of digital technology to support more remote work.

“Soft” issues are also critical. About two-thirds of respondents said they quit because “they felt disrespected at work.”  Executives should take that to heart because they set the tone for a respectful company culture. They can back that up with training and clear career paths that demonstrate respect.

Overall, addressing the supply chain labor shortage is not just about higher pay, but also about how the company relates to employees and their lifestyles. There is no silver bullet solution available. Instead, companies will need to consider “all of the above” to create a clear employee value proposition that will enable companies to attract and retain the employees they need to keep their supply chains moving.  It’s a puzzle±but those companies that crack it will be in a better position to keep their supply chains running smoothly and efficiently.

Disruptions Make Supply Chain Risk Scoring an Essential Management Discipline

Knowing the Score

Supply chain disruption has unfortunately become something of a norm. The interconnected, time-sensitive, and global nature of today’s supply chains means that an event can quickly have a broad ripple effect. And there is a growing range of potential disruptive triggers out there, from product recalls to cyberattacks, political turmoil, and violent storms.

Supply chain disruptions can emerge quickly and unexpectedly. As McKinsey & Company noted, “Consider the sudden eruption of a long dormant volcano that disrupts a supplier you didn’t know was in your supply chain….” Predicting such scenarios “is likely impossible for even the most risk-conscious managers.”

But being unable to predict supply chain disruptions does not mean that you can’t prepare for them.

With the broad range of threats facing operations today, companies need to have a formal, structured approach to identifying, understanding, and managing supply chain risk. Developing a disciplined approach can be a daunting challenge—but it can be made easier with a risk-scoring assessment that uncovers the supply chain’s weak points and identifies where disruptions are likely to have the biggest impact.

A Self-Diagnostic Tool Designed to Measure Supply Chain Risk Exposure

Effective supply chain risk management must be as thorough as possible. For example, our Dynamic Supply Chain Risk Scoring methodology provides a rigorous process that includes an in-depth analysis of the Bill of Materials (BOM) for products and the supply chains associated with each material. It evaluates supply chains across a set of major risk categories, based on Failure Mode and Effects Analysis (FEMA).

For example, it identifies problems such as:

  • Rigid or overly specialized component specifications that can limit the ability to adjust to supply chain disruptions.
  • Over-reliance on custom products and the limited number of suppliers that can provide those products.
  • Lack of visibility into the lifecycle and likely end-of-life dates for key components.
  • Insufficient inventory buffers that increase the risk of supply stockouts.

After identifying any weaknesses and vulnerabilities, Dynamic’s methodology ranks and prioritizes specific risks based on the likelihood of a potential disruption and the level of financial, reputational, and operational harm it might cause. Armed with that prioritized list, supply chain managers can allocate resources to target their top threats and move proactively to mitigate potential risks—modifying sourcing strategies to spread risk across more suppliers, for example, or stocking up on or finding alternatives for components that are reaching the end of their life. Over time, they can use the assessment as a guide to re-evaluating specific risks as conditions change.

When performed correctly, a risk evaluation and scoring effort is of significant undertaking. It can take several weeks to complete and involves responding to dozens of detailed questions. But the task is well worth the time that’s required.

To provide insight into the range of risks that should be covered, Dynamic offers a complimentary self-diagnosis checklist consisting of 10 questions that companies can use to quickly gain initial insights into their level of supply chain exposure, and better understand how a full risk-scoring effort could help them.

In today’s environment, companies can’t predict where the next supply chain disruption will be coming from. But they can build and strengthen their risk management capabilities and make their supply chains more resilient. A thorough risk-scoring initiative can be a powerful first step in the effort to take a more comprehensive, disciplined approach to managing supply chain risk.

How Artificial Intelligence Is Driving Product Lifecycle Management

How Artificial Intelligence Is Driving Product Lifecycle Management

Today artificial intelligence (AI) is increasingly being integrated into platforms across industries, and the healthcare sector is no exception, with AI being used to support medical device Product Lifecycle Management (PLM).

The ability to apply machine learning to PLM systems can help medical device manufacturers drive insights more effectively from product data that has been collected over many months, or even years, said digital transformation provider Kalypso. This sort of “product lifecycle intelligence” applies AI and automation to help users develop predictions and to recommend improvements, ultimately allowing manufacturers to prevent costly product delays and failures.

Kalypso detailed how one top medical device manufacturer addressed its global challenges by using AI and machine learning to drive measurable business results. “By combining PLM with product lifecycle intelligence,” they said, “companies can bridge the gap in PLM analytics capability today, allowing them to understand current performance, historical averages, and the variances across different business units and functions. These insights can help them develop more meaningful customer experiences, while driving business and product value.”

A Higher Level of Guidance

AI-powered product insights platforms now exist that help companies create and market their products more effectively, and they can contribute meaningfully to every stage of the product development cycle, said AI innovator Rodrigo Pantigas, CPO and co-founder of AI-driven insights startup Birdie, in a recent article for technology news site VentureBeat. Using the right platform during the different stages of the product development cycle can help companies maximize their return on investment.

For example, when conducting competitive assessments and evaluating trends during the initial development stage, AI-driven product intelligence can provide a higher level of guidance beyond human concept testing and social listening. “Instead of latent indicators caused by surfacing reading of comments today, product intelligence platforms can crunch the totality of conversations to understand where customer preferences are going,” reported Pantigas.

Once a product has been built and is ready to launch, “the right intelligence platforms can tap into existing conversations to understand existing customer perception both about the anticipation of this launch and consumers’ ongoing opinions about the product category and competition—which can also help to identify product issues and crises early on,” said Pantigas. “It allows you to contrast your product against the competitive set, as well as identify channels that could help get your product in front of a much wider audience.”

Real-time Metrics

AI offers the ability to generate real-time metrics on a product’s health, growth, and risk factors, which is “important for successful product managers to add an additional layer of efficiency with strategic and operational decision-making,” noted Skyjed, an AI platform provider for product teams. The ability to access data about a product’s health on the fly helps teams make more effective decisions as market conditions evolve, providing them with a competitive advantage.

Dynamic Technologies has a role to play in helping your company identify and manage the lifecycles of connected hardware and software in your supply chain. Our technology supply chain management services include product sourcing, supply chain design, and management, and product procurement. Review our case studies and learn more about how we can help you with your next project.

Medical Device Cybersecurity Challenges and How to Counter Them

Cybersecurity Challenges

As cyber threats to the healthcare sector continue to ramp up in frequency and severity in the U.S. and globally, they increase the risk of rendering medical devices inoperable and disrupting patient care. In a worst-case scenario, ransomware attacks on medical devices can put protected health information at risk or even threaten lives. In this environment, healthcare cybersecurity experts report the need for improved standards and better efforts by hospitals and manufacturers to share responsibility for medical device security.

One of the challenges healthcare organizations face is defending older legacy medical devices – which often were not built with security in mind—against the growing threats of hacker attacks, according to a recent MedTech Dive article. Hospitals contend that as the end users, they bear a heavier burden for securing medical devices than medical device manufacturers do, and the American Hospital Association wants to see the Food and Drug Administration (FDA) mandate lifetime support of medical devices by manufacturers.

MedTech Dive also says the FDA has warned that unpatched medical devices “will become increasingly vulnerable to cyberattacks over time and has called for more communication from OEMs when they can no longer support software upgrades and patches needed to address their devices’ cybersecurity risks.” 

Mitigating Risk Throughout the Product Life Cycle 

According to the FDA, the need for effective cybersecurity to ensure medical device functionality and safety has become more important with the increasing use of wireless, internet- and network-connected devices; portable media like USB drives; and the frequent electronic exchange of medical device-related health information.

The agency in April released draft guidance titled “Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions,” which is intended to provide recommendations to agency staff and the industry regarding cybersecurity device design, labeling, and the documentation that the FDA recommends be included in premarket submissions for devices with cybersecurity risk.

This new draft guidance replaces an earlier 2018 draft version and is intended to further emphasize the importance of ensuring that devices are designed securely, enabling emerging cybersecurity risks to be mitigated throughout the total product life cycle, and to outline more clearly the FDA’s recommendations for premarket submission content to address cybersecurity concerns. The draft was shared for public comment between April 8 and July 7 as Docket Number FDA-2021-D-1158-0001 on the Regulations.gov website, but as of this writing, it is not yet considered final or ready for implementation.

When securing medical devices, some of the primary challenges IT departments face include non-secure device designs, standardized configurations, patching restrictions, and insider threats, according to cybersecurity solutions provider Cybeats. They recommend the following four best practices to help healthcare organizations improve the security of their medical devices:

  • Endpoint protection – Securing not only the medical device but also the endpoints they connect to, such as workstations
  • Access management – Binding device authentication to the corporate authentication system
  • Asset management – Maintaining a reliable inventory of medical devices and software components
  • Vulnerability management – Conducting a vulnerability assessment of the software deployed on medical devices and reviewing vulnerability disclosures provided by vendors

For more medical device security guidance, visit:

Read Related Dynamic Technology Solutions Content:

Supply Chain Cybersecurity: The Ukrainian War Increases Your Company’s Risk

Steps to Managing Geopolitical Risk on the Road to Supply Chain Resiliency

Managing Geopolitical Risk

In addition to the ongoing effects of the pandemic, geopolitical issues around the world are creating unstable operating environments that can increase costs while lowering supply chain efficiency. Tariffs, sanctions, civil unrest, and military action can disrupt access to suppliers, markets, and shipping channels.

In the face of destabilization caused by events like the war in Ukraine or COVID-related factory closures in China, how can you bulletproof your supply chain to make sure that the products you need are not caught up in political disputes?

Some experts believe we’re currently in a period of re-alignment of manufacturing economics. For example, according to futurist Trond Arne Undheim, the world went too far toward lean, just-in-time supply chains, so now, in today’s political environment, the geopolitics of manufacturing needs to adjust, adapt, and align by putting greater focus on regional networks and innovation.

Thanks to the impact of the pandemic combined with geopolitics, “reshoring, even major reshoring that will be costly and take time to implement, is back on the table” for manufacturers, Undheim said in a recent Forbes article.

The Quest for Strategic Agility

With this sort of manufacturing rebalancing taking place, strategic agility is essential to managing geopolitical supply chain risks. “You should be confident in your organization’s ability to monitor, measure, and manage exposure to geopolitical events,” according to PwC business transformation analyst Matthew Comte.

Business leaders should be aware of their major supply routes, and how existing or emerging geopolitical conflicts could make them vulnerable, Comte explained. To reduce risk, they can consider not only regionalizing their supply chains or reshoring, but also other strategic actions.

To develop strategic agility, Comte recommends that company leaders:

  • Monitor geopolitical trends and events that may impact key suppliers
  • Identify risk exposure by mapping supply chain nodes for suppliers around the world
  • Assess each node’s vulnerability to disruption and the company’s ability to mitigate various types of geopolitical risks
  • Plan to adapt business strategies and operations to changing geopolitical conditions on short notice, such as by securing redundant suppliers or creating an inventory approach that straddles just-in-time and just-in-case strategies

Other steps executives can take to manage geopolitical risks more proactively and strategically include identifying quantitative political risk indicators; assessing the business impact of political risk; integrating political risk into enterprise-wide processes; engaging the board and the C-suite to incorporate political risk into strategic planning; and setting up a cross-functional geostrategic committee, according to a 2021 EY Geostrategy in Practice study conducted in collaboration with the Political Risk Lab at the Wharton School of the University of Pennsylvania.

The Impact of Digital Twins

Leveraging data and technology is yet another way for companies to mitigate geopolitical risks. For example, digital twins are being used by some companies as an emerging artificial intelligence (AI)-powered tool that allows supply chain managers to run “what-if” scenarios.

When political issues arise, digital twins calculate the risks, estimate the impact on a supply chain, and suggest ways to minimize disruptions and slowdowns, according to a recent Workflow article.

From strategy development to data management to technology solutions, Dynamic Technology Solutions provides a broad portfolio of supply chain services designed to anticipate and mitigate internal and external risks. Review our technology supply chain management case studies and learn more about what we can offer your company.

In Product Design, Risk Management Starts at the Beginning

As the old saying goes, “an ounce of prevention is worth a pound of cure.” That’s especially true when it comes to managing supply chain risk.

In a time when supply chain disruptions have essentially become the norm, companies are working hard to constantly monitor their current supply chains for problems. That’s a critical step, but they can do even more by incorporating risk management into the product development process early on, at the design phase.

That means approaching product design and specification processes with a risk mindset as a matter of course. Reducing the use of customized components. Using components that are available from more than one source. Exploring the use of parts made in the U.S. and other countries that are less vulnerable to supply chain disruptions. Coming up with specifications for noncritical components that make it possible to use a variety of substitutions when needed. And so on.

Overall, product design teams should look beyond cost when choosing components and give supply chain risk as much weight or more when making decisions. That’s a reversal of the traditional approach, and not always easy to do in the face of constant cost pressures. But remember: Supply chain disruptions can mean that a company can’t deliver products to customers. That can be far more costly to the business than using slightly more expensive components, and it can lead to lost sales, disaffected customers, and reputational damage.

Work Closely with Suppliers

It’s also critical to work with suppliers on this risk-aware approach to product design. Suppliers should be consulted up front and asked to provide insight into potential risks from their perspective. What can they tell you about end-of-life plans for the components in question—theirs and those of their parts suppliers? How long and strong are their relationships with the manufacturers they rely on? How well do they know the potential risks involved in the countries they source from? Are they diligently managing risk in their supply chain?

Various channels of communication should be kept open to allow broad discussion of these issues. But companies should also ask suppliers these questions in a formal fashion. That is, they should require suppliers to provide detailed lists of potential risks in their quotes and master service agreements. This will clearly underscore the fact that they are expected to collaborate on managing supply chain risk. And it will give the company’s product-development group valuable insight into how to design risk out of products; allow procurement teams to weigh risk factors when evaluating proposals and vendors; and give the company an opportunity to make informed decisions about where it wants to assume, share, reject, or modify those risks.

We’re all familiar with the concept of “design for the supply chain,” in which products are designed with supply chain optimization in mind. Now, that needs to be updated to “design for supply chain risk.” The more product designers can know about supply chain risks in advance, the more they can do about those risks—and take steps to design supply chain resilience into their offerings right from the start.

Software Is Not a Panacea for Product End-of-Life Management

software laptop user

Many companies involved in the medical device and pharmaceutical industries use software to monitor the lifecycle of products and components, particularly those items nearing their specified end of life (EOL). But is this approach effective? Sometimes managers don’t realize that software is not necessarily a reliable lifecycle management tool until it is too late, after device decommissioning has had an impact on patients and public health safety.

Most large suppliers have designated EOL dates for products and components, but the end of life for certain medical device components is not as simple as just replacing the components. It requires a company to evaluate what’s being replaced, identify the impact, make necessary updates, and conduct rigorous testing and reviews to verify and validate the new product.

As we previously reported, if a product goes EOL without proper advance planning, it has the potential to disrupt the company’s supply chain, negatively impact revenue, diminish customer loyalty and incur unexpected costs. Companies failing to track EOL effectively also risk using technology that is no longer supported by its manufacturer, which can be dangerous and incur liability.

Managers may rely on software to plan for EOL, to be notified of upcoming EOL dates, and to manage change requests during an EOL migration. However, software solutions alone fall short, because the necessary end-of-life information often must be manually supplied by product manufacturers or suppliers. This human factor introduces risk and negates the accuracy of the software.

In those cases, the software designed to track EOL issues can provide companies with a false sense of security, leaving them in danger of being caught unprepared. Because software solutions always present an inherent risk of not delivering essential EOL information, companies need a reliable and automated means through which to obtain timely and accurate EOL information from their suppliers and OEMs.

Human Involvement Required for Complete EOL Transparency

Dynamic Technology Solutions has developed EOL and lifecycle management services to meet this need. We deliver on this requirement by proactively contacting the product suppliers regarding EOL issues to gain accurate, first-hand insights into current conditions and forecasts.

Armed with these insights, we can provide a consolidated view of lifecycle roadmaps with data integrated from our 800+ OEM and technology partners, enabling us to deliver automated alerts to key company stakeholders to inform them of EOL dates, which trigger a proactive EOL transition process.

Dynamic helps ensure seamless transitions and continuity for any changes that affect the components in our customers’ devices, while reducing risk. Learn more about Dynamic’s proactive EOL planning services by clicking here.

Software solutions provide efficiencies for countless business applications across different industries. But until there is a 100% reliable means to collect and disseminate EOL information from hundreds of suppliers, software applications for EOL management can never be expected to provide the level of safety and assurance required for medical device and pharmaceutical applications, where lives and human welfare is at stake. That’s why Dynamic invests the time necessary to ensure complete EOL transparency.

To Achieve Supply Chain Resilience…Shift Your Focus from Cost to Risk Management

supply-chain-resilience

It wasn’t long ago that companies could keep watch on their component costs without having to give undue attention to supply chain logistics. All of that changed with the supply shortages and delays created by the arrival, in rapid succession, of the COVID-19 pandemic, climate-related events, and the Russian invasion of Ukraine, all of which highlighted the fragility of supply chains.

These disruptions have made it clear that supply chain risk management strategy must now be top of mind. As a recent article in the Harvard Business Review (HBR) put it, “As managers navigate this dynamic, they need to think beyond product costs and supplier choices.”

Some areas of supply chain risk that managers should address include:

  • Economic: Issues related to supplier health at every tier in the supply chain, including supplier bankruptcy or manufacturing stoppages
  • Geopolitical: The effects of international conflicts, such as U.S.-China trade issues and the war in Ukraine
  • Environmental: Issues related to natural disasters or sustainability, such as societal demand to reduce greenhouse gas emissions
  • Cybersecurity: Protecting against cyber threats to supply chain management

While many manufacturers previously approached their suppliers focused mainly on price, today they must develop a more strategic approach to achieve resilience, flexibility, and sustainability, said HBR. By focusing on supply chain risks, managers can learn to stabilize supply chain disruptions in the near term while developing structural resilience in the long term.

To do this, companies must have strategies that allow them to assess the risk of their suppliers, as well as to mitigate those risks, noted business benchmarking site Brainyard. Managers need to know what’s happening not only with their Tier 1 suppliers—the suppliers they work with directly—but also the Tier 2 and 3 suppliers further up the chain.

“Once an organization has assessed the risk of its supply chain partners, the best way to build resilience is to diversify its supplier base,” reported Brainyard. “That means finding redundant suppliers for key parts and materials that are located in different parts of the world so, for instance, a hurricane in a certain region doesn’t halt all shipments of a crucial material. It could also mean finding partners closer to home—maybe not in the same country but on the same continent.”

Diversifying the supplier base and keeping safety stocks on hand are costs that may be more expensive or hard to justify, but can be important for building structural resilience, risk management professionals at McKinsey & Company wrote recently.

Other actions that can be critical to building resilient supply chains include “creating a nerve center for the supply chain, simulating and planning for extreme disruptions, and reevaluating just-in-time strategies,” the McKinsey article noted.

With supply chain risks now firmly on the C-suite’s radar, leaders must not only create supply chain risk-reduction strategies, but also revisit and update them continually.

It’s only by taking steps to mitigate risk and find the best product options that you’ll achieve better business outcomes. Learn more about Dynamic’s portfolio of supply chain services designed to anticipate and mitigate internal and external risks.