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ML Journal April 2022

POV: Resilient 4.0 Supply Chains

Building a resilient supply chain network cannot be achieved by any one company alone. True resiliency has to include empowering the whole ecosystem.   

In chaos theory, the butterfly effect describes a potential situation where small changes in initial conditions may initiate a series of non-linear effects that ultimately lead to large scale and unpredictable consequences in complex systems. Famously, it cites the flapping of a butterfly’s wings in a distant jungle that may initiate increasingly dramatic changes in climatic conditions which finally result in a typhoon on the other side of the planet.

In today’s world of global manufacturing networks and complex supply chains, butterflies have been flapping their wings a lot lately – whether it’s at a live animal market in Wuhan, or some suspect steering in the Suez Canal.

For manufacturing companies to be able to respond quickly to such potentially globally disruptive events, effective action demands multiple layers of insight and resiliency, and perhaps most of all, broad and deep visibility across multiple tiers of their supply chain networks, right down to the butterflies on the lowest tier.

To do that, supply chain networks need to be capable of gathering, analyzing, and sharing timely data that will alert every link in the chain about potential upcoming disruptions or shortages to allow all the partners in the chain the time to take appropriate corrective action.

But right now, that’s a problem. As the latest MLC survey reveals, the two biggest obstacles facing manufacturing companies as they strive to achieve true resiliency across their networks are the varying degrees of digital maturity of their supply chain partners and a lack of common data platforms across their networks.

Yet most manufacturing companies don’t yet have any strategies in place to solve these issues. Only one in five say they currently have specific policies to help support their supply chain partners in accelerating the maturity of their digitization efforts to ensure a more effective and resilient end-to-end digital supply network.

Unless larger companies start to collaborate more effectively and work more closely with their smaller partners at every tier to close that digital divide, this situation is likely to continue to undermine even their best efforts at preparing for, and coping with, future disruptions. Helping to empower the entire manufacturing supply chain ecosystem is becoming increasingly critical. And it’s in every company’s interest to do so.

If major manufacturers can do a better job of looking after the butterflies, future supply chain typhoons may never develop into anything more than a gentle breeze.  M

Paul Tate

About the author:
Paul Tate is Co-founding Executive Editor and Senior Content Director of the NAM’s. Manufacturing Leadership Council.

 

 

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