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Understand your supply chain risks and boost resilience

Supply chain risk can hit in unexpected places. Take the 9.0-magnitude earthquake that struck Japan on March 11, 2011. It and the subsequent tsunami destroyed towns, transportation links, and industrial infrastructure, and triggered meltdowns at the Fukushima Daiichi nuclear power plant. Then add the extensive flooding in Thailand later that year, which affected production at more than 900 factories that produce components for the automotive and high-tech sectors. In the months that followed, companies around the world struggled to cope with resulting shortages.

Why did they struggle? Because they were caught off guard. The products they needed were often sourced from the second or third tiers of complex supply chains they didn’t understand.

These incidents spurred us to launch a research effort aimed to create tools that would give companies a better understanding of the risks in their own supply chains, and improve their ability to monitor and respond to potentially disruptive events as they happen. We created Resilience360 – a supply chain risk management solution built on three sophisticated instruments: continuous assessment of supply chain risk and resilience, real-time incident monitoring, and dedicated logistics control towers that can actively respond to incidents and manage business continuity.

Risk assessment

Resilience360 first maps every node in a supply chain – down to third- and fourth-tier suppliers. Afterward, we evaluate the risk level at each node with proprietary tools, including country-level risk maps and our unique Supply Chain Risk Exposure Index. We then build a picture of the network’s resilience, based on the criticality of parts supplied, the availability of alternative sources or buffer stocks, and detailed surveys of supplier risk mitigation plans.

Incident monitoring

Supply chain risk management works best when you receive the earliest possible notice of potentially disruptive incidents. Resilience360 tracks multiple categories of risk events in real time throughout the world. Once we have built a model of the entire supply chain, sites across the network receive immediate alerts of potentially disruptive incidents.

Early warning makes it possible to contact supply chain partners and take mitigating actions, like sourcing components from backup suppliers. The tool also logs feedback from individual sites, keeping an up-to-date picture of the current state of the entire network, and helping managers coordinate cross-network responses to major incidents.

Risk response

Finally, Resilience360 offers a dedicated logistics and risk control tower that evaluates the potential impact of supply chain disruptions by interacting with supply chain partners. It also identifies mitigation strategies, such as alternative transportation modes or different routes, and manages their execution in collaboration with stakeholders.

Risk response provides a complete picture of available options in the event of disruption so you can pick a robust and cost-effective solution.

Between risk incidents, the control tower performs a data-gathering and reporting role – continually updating information about evolving risks, surveying supplier business continuity plans, and reviewing potential mitigation strategies.

Cutting costs, boosting agility

Supply chain risk is growing in importance and changing in nature.

Resilience360 enables rapid response to supply chain disruption, delivering significant cost savings, for example, by reducing the need to rely on premium-priced expedited logistics services and minimizing the occurrence of lost production, lost sales, and brand damage. And because the system is built on a robust and flexible cloud-based platform, it is able to handle even the most complex supply chains, integrate with wider business systems, and rapidly adapt to changes in an organization’s network.

Supply chain risk is growing in importance and changing in nature. Make sure you understand your supply chain so that you can develop strategies to minimize, manage and even benefit from those risks.

Supply chain resilience best defense against growing global risks

DHL Resilience360 – Managing Risks in Your Supply Chains

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