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If you’re reading this, then you’re probably no stranger to supply chain disruptions. Disruptions are an undeniable occurrence in supply chain. Yet while they may be difficult to prevent, it is entirely possible to increase agility in order to withstand and quickly recover from them.
Building agility starts with good visibility and an understanding of the entire supply chain network. Let me explain why.
Author
Andreas Martin
Director Software Quality & Support
Current disruptions and their consequences
Most of us would agree that the last couple of years have vividly demonstrated how occurrences including a pandemic, war, natural disasters, labor shortages and other major disruptions can exacerbate existing gaps and breakdowns in supply chains.
Whether you are relying on consolidation or diversification strategies for your supply chain, there is no end to the list of risks – and these risks are constantly tested by global supply chain networks that are growing in complexity. The more complex and global the network, the more susceptible it is to disruptions and thus the more difficult it becomes to recover.
Disruptions can have devastating consequences on a business’ profitability, sales growth and operation costs1. Moreover, expected losses from supply chain disruptions make up a significant portion of a business’ EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and this portion is even greater for companies in the automotive sector2.
To add to this, recent shortages in semiconductors and key raw materials from Ukraine and Russia resulted in the fact that European automotive manufacturers encountered a significant loss of vehicles with multiple plant closures across Germany in March 20223.
Supply chain agility – the answer to market uncertainty
While the risk of disruption cannot be avoided, it can be reduced by improving supply chain agility. According to Gartner4, at least 87% of supply chain professionals surveyed are currently planning investments in supply chain resilience. So now you may be asking: How exactly, can agile or resilient supply chains be characterized?
Agile supply chains are supply chains with the ability to bounce back from any form of disruption. They serve as a competitive advantage in fulfilling demand, driving customer value, facilitating business success, and building strong networks. An agile supply chain, for example, has various sourcing strategies to ensure uninterrupted supply if particular sources are cut off.
End-to-end supply chain visibility – the first step towards agility
Supply chain visibility provides businesses with the knowledge and understanding of activities across their network, from the big picture to each minute detail. It is the fundamental step that helps businesses to react faster, make better evidence-based decisions in disruptive environments and know where to focus their investments.
For those businesses that acknowledge the importance of visibility and might apply traditional approaches to achieve it, it is also becoming apparent that the use of spreadsheets and the like can no longer meet the challenging complexity of today’s networks. Considering the importance of visibility in building supply chain resilience, a dedicated tool is required.
Technology is key
Still thinking about the investment involved in building a resilient supply chain? You’re not alone. But do understand that a fast-track solution to achieving end-to-end supply chain visibility and resilience lies in technology – the driving force behind every transparent supply chain.
Digital end-to-end supply chain visualization tools that are integrated with powerful analysis tools can boost network visibility to achieve transparency – allowing you to see into every node to understand and assess the supply chain entirely.
Take the first step with 4flow NEVA®
Take a minute to think about how your supply chain could benefit from a good visualization tool. Ultimately, an end-to-end visualization tool should help you to:
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Analyze your supply chain network key performance indicators over time to compare and make better data-driven decisions.
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Identify weaknesses in your supply chain network, such as changes in future demand or expensive or unsustainable modes of transportation.
4flow NEVA® (Network Exploration, Visualization and Analysis) is a new software product from 4flow that helps you to achieve these things and make the first step towards a resilient supply chain.
As one of the most powerful and accurate supply chain visualization software products, designed by experts with over 20 years of experience in the industry, 4flow NEVA® serves as a perfect starting point for planning a resilient supply chain network.
4flow NEVA® can help you gain supply chain transparency and end-to-end visibility, improve network planning, prepare for disruptions and take the first steps towards an agile supply chain.
Get in touch with us to find out more. Try 4flow NEVA® for free with no obligation to purchase.
Sources
1-Springer: Supply chain disruptions and resilience: a major review and future research agenda
2-McKinsey Global Institute: Risk, resilience, and rebalancing in global value chains
3-Europe Autonews: Ukraine war cost VW, Mercedes, BMW, other German automakers 150k vehicles march
4-Gartner: Gartner Survey Finds 87% of Supply Chain Professionals Plan to Invest in Resilience Within the Next 2 Years