Supply chain resilience is the ability to adapt and survive unforeseen disruptions. It enables enterprises to respond ahead of competitors and meet changing market demands. It can help prevent and mitigate disruptions like supply/demand imbalances and shortages. In addition, it can improve competitiveness. Here are some strategies to increase resilience:
 
Creating a nerve center
 
Creating a nerve center for supply chain management can improve the speed and effectiveness of your decision-making. By bringing together the specialists from all aspects of the supply chain, you can develop a team that will make the most of available resources. You can also build a stronger connection with key suppliers by establishing deeper partnerships. Your nerve center will act as a central hub to share information, set up essential working infrastructure, and track the progress of key initiatives. Once implemented, the benefits can be seen within five weeks. Creating a nerve center for supply chain operations will improve your cost base, protect your margins, and drive organizational alignment.
 
Supply chain management has undergone tremendous changes over the past few decades. With access to cheaper labor, regulatory incentives, and proximity to growing consumer markets, businesses have extended their supply chains globally. As a result, creating a nerve center for supply chain management can help you stay ahead of disruptions.
 
Creating scenario-based planning
 
Creating scenario-based planning can help businesses better balance the risks and potential trade-offs they face in their business. It can also help companies plan for the worst-case scenarios, helping them avoid delays and potential problems. Traditionally, supply chain managers have focused on minimizing surplus and keeping stock levels low. However, when the Ebola epidemic hit, many businesses were forced to bear the brunt. They were forced to cut back production and inventory, and many retailers struggled to sell their stock.
 
While a shaky supply chain is always a risk, many companies are taking steps to increase resilience in their supply chains. This requires a comprehensive set of plans and strategies. For example, companies should look into resetting capacity utilization targets, identify triggers to add capacity, and align order fulfillment strategies with customer demand and needs.
 
Splitting inventory across multiple fulfillment locations
 
Whether you're an ecommerce retailer or you're a traditional retailer, the ability to split inventory among several fulfillment locations increases the resilience of your supply chain management. By doing so, you can keep your inventory closer to the end customer while saving space and time.
In recent years, production networks have begun to regionalize. This trend is likely to continue, particularly as Asia continues to grow faster than other parts of the world.
 
Increasing visibility

Increasing visibility is a critical component of resilience, as it enables companies to identify potential problems early and make quick decisions. It also helps them avoid disruptions. Achieving this level of visibility allows companies to develop new capabilities to assess the risks in their supply chain. By using real-time data and analytics, companies can make better decisions about how to handle disruptions.
 
Supply chain visibility helps businesses track individual components and products in the supply chain. It provides near real-time data at every step of the process, giving management teams full transparency. This transparency helps them develop better business strategies and risk management plans, which help them act proactively to mitigate risk.
 
Embed ‘Continuous Improvement’ in your organization’s DNA
 
Building resilience into your supply chain processes is a strategic initiative, whose goal is to have assured business outcome and profitability.  When done right, cash-rich organizations can achieve it faster. But what about the small players, startups? These businesses usually have a tight purse-string. 

A doable, affordable yet assured pathway for building resilient business workflows is to install Lean, Kaizen in your company’s DNA. Kaizen-ing by default minimizes risks, reduces operational costs, improves product quality and catapult’s customer satisfaction.
 
Kaizen-ing hence brings dual benefit- It increases both topline and bottom line of a business, regardless of its size or industry sector. Contact us to know more about How Lean, Kaizen can help your business?
 
An important point to note is that- While taking steps to build business resilience, it is also necessary to measure success. A Bain Resilience Index measures the resilience of individual companies. I’ve a separate post on this, check it out here.

Related Reading:​

1. Kaizen for pharmaceutical, medical device and biotech industries
2. How to cut costs strategically using Kaizen
3. Streamline processes and workflows with Gemba Walk.
4. Top Ten Strategic Decision-Making Tools for Operational Excellence

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Categories:  Strategy | Operations | Supply chain logistics

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Supply chains in all industry sectors are strained; but the situation can be successfully squashed to a large extent with business process re-engineering. 

I was watching this news video about world’s largest chemical producer staring a shutdown in the face. Not just this news, but there are several not-so-big supplier units facing hard times. Such incidents reiterate my opinion (and I've been sharing this view for the past 2-3 years) that life science organizations globally must revisit their supply chain processes! 

It's true that life science companies have been addressing supply chain issues since the break of coronavirus pandemic further aggravated by port closures in several parts of the world. However, most companies are fire-fighting the issue thus bleeding their bottom line severely. Therefore I say, that, there is a dire need for supply chain process re-engineering in life science organizations. But then, how to go about it?
 
In this post, I shall touch upon ways to overcome challenges of supply chain management within the life science sector.
 
Life sciences supply chains are a unique ecosystem, filled with complex regulatory requirements, varying geographical landscapes, and multiple stakeholders. These factors can lead to significant challenges for organizations. These headwinds can lead to high lead times, high production cost, wastages, delays in product launch, increased remediation costs etc. As a result, enterprises must establish safeguards and shore-up their delicately balanced supply chains to avoid such pitfalls. Furthermore, include supply chain related factors in your QBD protocol while developing the products.
 
In addition to regulatory requirements, life sciences companies face significant risk when it comes to transportation. For example, delays or damaged shipments may result in thousands of dollars in labor costs. In addition, damaged goods must be disposed off according to legal requirements. As a result, life sciences companies need to be more efficient in addressing these risks. Digital tools and analytics are helpful in overcoming such challenges.

Digital tools and analytics help companies better predict customer demand, analyze supply chain complexities, and link automated production units to real-time demand. These tools and technologies also improve the transparency of the supply chain, which can boost trust and reduce cost-to-serve. Further, emerging technologies such as innovative Enterprise Resource Management (ERM) solutions can also help address such challenges.
 
A global shortage of talent in supply chain management with expertise in life sciences, is another challenge for life sciences organizations. According to a recently published survey, firms in the life sciences sector are worried about their ability to find the right talent to fill their positions. With labor costs rising, the competition for skilled professionals is fierce. Dedicated teams who could handle the organization’s supply chain led by an operational excellence expert is thus the need of the hour.
 
Additionally, shipping life science products is often a delicate process. Although drug-products are developed complying to the ICH norms of stability, a delay or deviation in the supply chain can lead to product expiration or render the entire shipment useless.
 
In addition to delivering products on-time, companies must balance consumer demand with the safety of their products. Sometimes, even the slightest change in temperature can ruin a product. Real-time tracking helps companies and logistics providers react quickly to potential delays. It also gives them a 360-degrees view of the entire supply chain, allowing them to respond before problems occur.
 
In addition to ensuring the safety and quality of life science products, companies must also meet regulatory standards. The life sciences industry is one among the most regulated industries in the world, and regulatory requirements vary widely from country to country. It is imperative for life sciences firms to follow international guidelines and standards. Many of these regulations are complex, and non-compliance with these regulations can result in stiff financial penalties, brand damage, and even litigation.
 
Another challenge in life sciences supply chain management is finding the right logistics provider. The selection process is not simple and often involves numerous variables and factors. It is imperative to choose the right delivery partner. If something goes wrong, the right supplier can help the business bounce back. In the life sciences industry, overcoming challenges and finding the right logistics provider is vital. Hence, business processes underlying vendor selection must be reset regularly.
 
Yet another parameter of improving supply chain is use of artificial intelligence (AI) in transforming mobility. Fully automated driving vehicles equipped with self-learning navigation systems are expected to boost supply chain logistics efficiency to the summit.
 
Logistics industry presently, still relies on human involvement to varying degrees; perhaps because our human race is diligent and wants to solve all problems ourselves. But the times are changing …
 
We have passed thru the steam age and the electronics age, are in the current information age, but the future shall be the age of artificial intelligence. 

You may say we are using smartphones or have robots doing the cleaning or handling warehouses or machines with CIP (clean-in-place) automation or even robots leading businesses as a CEO. But it is only the tip of the iceberg. In the future, AI technology will come alongside with us and change the world. 

So, what world will be the next world we live in? 

My answer is- Drug delivery techniques are already undergoing a profound change. Combined with fully automated logistics in the life sciences sector, we'll welcome a brand-new world …

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​In a world of ever-changing demand, labor shortages, raw materials scarcity, and spiraling costs, the cargo industry needs to take action to remain competitive.

If not, inaction will stifle future growth and negatively impact productivity. One way to combat these challenges is to improve operational excellence (OpEx). In this post, I'll examine some strategies for making your logistical network more efficient. Listed below are some of the most important principles to improve operational excellence in the logistics industry.

Continued improvement- Continuous improvement will increase efficiency. Without continuous improvement, your management team will have little time for top-line activities and innovation. As a result, the changes may not produce growth or save your company. In order to achieve continuous improvement, everyone within your company must know their contribution to the overall business process and follow a standard methodology for implementing changes. Note that, continuous progress is crucial for any business; but it's not enough, you must also have good strategic goals in place.

Set clear goals- Establish your vision and KPIs (key performance indicators) so that everyone can align their efforts. Clearly define the process and goals of your OpEx process. Educate your employees about the strategy. Then, empower them to participate in the process. By involving them, you'll improve employee knowledge and customer satisfaction. A well-designed OpEx strategy is an ongoing process that requires time, effort, and resources.

Clearly define the goals of your organization. Your goals should be SMART-defined i.e. specific, measurable, achievable, relevant, and time-bound. Your goals should be measurable and include broad goals as well as specific KPIs. This will help your organization improve in terms of performance and culture, resulting in long-term sustainable growth. If your organization can accomplish this, you'll be on your way to sustainable growth.

Operational excellence is a critical component of the logistics industry, because it increases efficiency, eliminates costly errors, and promotes a consistent work culture. Besides having stringent quality standards, operational excellence also requires training and empowerment of employees. For instance, in Bollore Logistics, a comprehensive training program helped its employees become more effective, more efficient, and more productive; read the full report here. And this in turn benefited the company's customers and suppliers.

Communication- In addition to SMART strategies, it's also important to improve communication. A well-communicated company culture will enable employees to focus on their tasks and work towards the same goal. Providing feedback and rewards for outstanding performance will encourage employees to continue their efforts, and ultimately, contribute to operational excellence.

The key to improving operational excellence is continuous improvement, effective communication, and a workforce-centric culture. The logistics industry requires all these things to succeed.

High energy costs and disruption of raw materials are just some of the challenges organizations face in today's volatile economy. With these challenges, firms must constantly improve their processes and operations to remain competitive.

​In addition to improving productivity and efficiency, they must also improve cost and quality. That's where operational excellence comes in. Ultimately, it's all about executing a winning business strategy. More on operational excellence, checkout Top Ten Strategic Decision-Making Tools for Operational Excellence

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With shipping and airline cargo bottlenecks, material delays are a common feature in today’s times. And this affects both manufacturing and service industry alike. Although the pandemic is mainly responsible for this supply chain mess, supply chain disruptions can be mitigated and even prevented by following robust supply chain processes at your organization.

So, how to prevent supply chain disruptions?

Checkout this video to know more about top 2 ways to mitigate supply chain disruptions.

This video belongs to my YouTube video series- One-minute guide to continuous improvement where I explain various topics related to continuous improvement for operational excellence and business growth.
​
Watch on …

Are you ready to improve supply chain processes at your roganization?

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1. One minute continuous improvement guide series.
2. Kaizen explained with examples and case studies.

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Supply chain management has always been full of challenges, more so now in the pandemic era. However, supply chain disruptions can be best mitigated or even prevented by improving supply chain business processes. Installing a culture of continuous improvement not only improves supply chain operations, but also saves cost.

Checkout this video to know more about how to go for a purpose-driven supply chain.

This video belongs to my YouTube video series- One-minute guide to continuous improvement where I explain various topics related to continuous improvement for operational excellence and business growth.

Watch on …

Are you ready to install a culture of Continuous Improvement at your organization?

Follow Shruti on Twitter, Facebook, YouTube, LinkedIn

1. One minute continuous improvement guide series.

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#supplychainmanagement  #supplychainprocessimprovement  #continuousimprovement

In this blogpost I shall touch upon R&D process improvement in order to reduce procurement, supply chain logistics cost. If this intrigues you, read on …

Reducing procurement, supply chain logistics is an omnipresent to-do issue for business leaders, pandemic or otherwise, but more so in today’s times because of transport disruptions due to the pandemic.

I would say there are broadly two ways to handle any issue- proactive and reactive. Improving R&D processes via Design Thinking & Kaizen is a proven proactive way of making sure that external environment will have minimal to negligible effect on your supply chain function. Further, this is true for all companies in the manufacturing as well as the service sectors.

So, I come to my favorite questions-

• Did you know that improving your R&D business processes can have immediate direct savings of 35 to 40% of your sourcing and supply chain costs?
• Did you know that R&D process improvement can ensure that your supply chain is productive and functions at an all -time-good level regardless of disturbances in the external environment?

Want to know more? Check out the video below-

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• How to cut costs strategically using KaizenCulture of Kaizen
• How does Kaizen Enhances Employee Engagement?
• Quality-by-Design (QbD) approach means Design for Manufacturing (DFM)​​

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Just-in-time (JIT) technique is usually applied to manufacturing and service functions of companies, but not to their R&D divisions. 

​Considering the vast benefits of JIT methodology, I recommended using it in R&D division of a Life science company (my client). This company had a major set back; consequently, had a severe cash-crunch and was looking for a better option to sustain business and avoid employee layoffs.

This project was accomplished few years ago. However, the learnings are relevant today perhaps more than ever before.

R&D departments of pharmaceuticals, vitamins & supplements, natural health products, cosmetics and personal product companies need a very large quantity of consumable items. Some of the consumable items are- raw materials, packing material, tools, machine spares etc.

Some of commonly used raw materials in life science R&Ds include- Active ingredients (such as bulk drug, herbal extract), additives (such as bulking agents, colors, flavors, perfumes, emulsifiers, solvents etc.), packing materials (such as tubes, bottles, caps, wads, aluminum foil, paper, glue), machine parts (viz. tablet punches, dies, chromatography columns).

These consumable items are extensively used during experimentation for new product development and testing. In fact, the R&D department cannot function at all if consumables are not provided.

In research-based life science companies and contract research organizations, consumables comprise of 20 – 45 % of their R&D budget. Therefore, any savings in consumable expenses help organizations to lower over-head costs big-time, and Just-in-time methodology does just that!

A four-step approach was taken for this project-

Step 1: The existing supply chain process was mapped, inventory demand-supply schedules reviewed and gaps in these processes were identified.

The objective was to re-design the supply chain process to include Just-in-time technique to lower R&D over-heads (without disturbing R&D output) and the savings generated thereof could be utilized for other needs of the business.

Step 2:  A supply chain process improvement strategy was designed.

Note that, there are several dos and don’ts prior to applying Just-in-time technique for process improvement or process design. One of such important to-dos, is to ensure all items being sourced comply to CQA (Critical Quality Attributes).

Step 3:  A core team comprising heads of R&D, Manufacturing, Quality, Regulatory and Procurement was formed.

Then all consumable raw materials were classified into- expensive, moderate and cheap items, based on their cost and availability. Vendors were approached to provide samples (of raw materials) for testing. Once test results proved compliance to CQA, the vendors were short-listed.

Step 4:  Just-in-time process was set up.

This also involved effective collaboration between R&D, resource planning and quality groups. Then, meetings were conducted with vendors to provide raw materials at negotiated price to R&D. Vendors for expensive raw materials were approached first, followed by those for moderate and cheaper items.

Note that-

• Depending on the size of the organization and the number of consumable items to be worked on, it might take from 2 to 8 weeks to fully set up Just-in-time in a company.
• Just-in-time methodology encourages sourcing from local or regional vendors rather than overseas. Should a company go for an overseas vendor, then make sure that vendor has a distribution warehouse situated locally or regionally.
• Savings from Just-in-time implementation are further augmented when R&D's follow Quality-by-Design (QbD) approach for product development.

Result Dashboard: 

1. Through flawless execution of Just-in-time technique, around 35% of R&D over-head cost was saved in the first year.
2. Besides lowering over-heads, Just-in-time also helped free-up warehouse capacities.
3. Continued implementation of Just-in-time technique maximized over-head savings up to around 80%.

To know more on how Just-in-time technique can benefit your organization-

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