Building a Resilient Supply Chain in 2024: A Guide for Businesses

The term “black swan event” refers to an occurrence that is an anomaly or outlier causing significant disruption or change. However, these events continue to occur with relative frequency. The long-standing adage that “the only constant is change”, continues to ring true.

In recent years, we have seen several “black swan” events that have tested our supply chains. The latest geopolitical disruptions in the Red Sea come only a year or two after the Ever Given blockage of the Suez Canal, a Russo-Ukrainian war, and a pandemic that turned our lives upside-down.

Therefore, supply chain leaders should continue to assume that these will occur and thus, building a resilient supply chain is not only an advantage but a necessity.

Understanding Supply Chain Resilience

A resilient supply chain refers to the ability to anticipate, prepare for, respond to and bounce back quickly from disruption and such aforementioned events. It involves creating systems or processes that are predictable and provide for security, yet at the same time have flexibility built in to withstand crises and operate under stress.

How to Improve Supply Chain Resilience

Diversify Your Resources 

By sourcing your inputs from a single supplier or region, you expose yourself to unnecessary risk. An unexpected disturbance in that region or relating to one supplier could mean a significant disruption to your production. This can delay weeks or months of production while you find a new source. Introducing strategies like varying your supplier base and sourcing from trading partners in closer proximity to you (i.e. “nearshoring”) will render disruptions in any one region as a mere inconvenience, rather than proving catastrophic.

Invest in Technology

Technology and its rapid development provides unprecedented visibility and flexibility in supply chain management. Ensure to leverage these tools to predict disruptions (be they from weather, geopolitical events, or otherwise), optimize routing and ensure transparency across your entire supply chain. The more information you can access quickly, the better you can predict issues and react accordingly.

Forge Strong Partnerships

As disruptions become more frequent and more significant, our reliance on those we trust increases. No person or organization operates in isolation and it’s important to be willing to ask for help. By fostering strong relationships with both your logistics partners and suppliers, asking for help becomes easier and also likely to be better received. At Navia, we lean heavily into this concept and we like to work with our partners on building long-term relationships.

A Focus on Sustainability

Sustainability is often seen as a means to combat the effects of climate change and, although this is one of its functions, benefits to the bottom line are often overlooked. The integration of sustainable practices not only benefits our environment but often lends itself to reducing your waste and streamlining your operations, which in effect reduces costs and wasted time.

Continuous Risk Assessment

It’s easy to become so engrossed in daily activities that we forget to take time for reflection and assessment. Allocating time specifically to review current supply chain processes and identify vulnerabilities is extremely important. This will allow you to formulate contingency plans which will become critical when the unexpected occurs.

Implementing your Resilience Strategy

To implement changes we must first understand our current state. Start by mapping out your supply chain, then assess the potential risks. Once you have found areas for improvement, plan contingencies and methods for bolstering it. It is then important to train your team on how they should respond should a disruption arise. This will also involve liaising with partners that will contribute to contingency plans and getting their buy-in. Keep an eye out for opportunities to also collaborate with partners on their contingencies.

As we move through 2024 and beyond, supply chain durability and resilience will prove to be imperative. It could be a determining factor in your business’ capacity to thrive. In embracing the aforementioned strategies, you can bolster your supply chain to bounce back from the current disruptions as well as future-proof against those that certainly lie ahead.