Simulating risk: Supply chain survival in the 2020s

Supply chain operations throughout the 2020s have been presented with an unprecedented number of problems. Businesses have been faced with challenges stemming from:-

• Covid19
• Brexit
• Material shortages
• Increased lead times
• War
• Economic instability
• Rising inflation

For UK business owners the climate has posed unique problems – the UK is an island, and shipping goods in and out of the country comes with additional restrictions.

Supply chains have been left struggling to cope. Business growth has stalled with companies battling against blocked shipping routes and massively increased lead times. 

In 2021 the average annual cost of disruption to the supply chain business globally was £164 million ($184 million), with a cost of £130 million ($146 million) in the UK.

As if this wasn’t enough to put a strain on UK businesses, rising energy costs coupled with uncertainty around government spending and interventions are threatening to restrict growth even further.

What does this mean for the supply chain industry?

Supply chain companies are stretched thin, and the focus has shifted quickly from expansion and growth, to loss mitigation and cost-saving initiatives. 

Lean processes which were already under scrutiny will be analysed even more closely to uncover further efficiencies. Companies may be faced with the hard decision to slash labour costs as manpower is sacrificed to maintain profits.

The recent economic, political, and economic factors have left business leaders in the unenviable position of dealing with the fall out. This has generated a period of uncertainty for organisations who are left wondering if the crisis will continue, or if the current situation is merely temporary.

Should goods and materials be stockpiled at strategic points to offset the growing pressure? Or should they sit tight and wait for the storm to pass in the belief that the cataclysmic series of events is unlikely to recur?

With the Global Supply Chain Pressure Index still registering high, it is prudent for supply chain companies to take steps that will protect their interests, both financially and economically. 

How can supply chains mitigate potential risks?

A proactive stance on risk mitigation could be the variable that shifts the balance from survival to profitability. Research shows that the adoption of business intelligence and analytical software is increasing across the supply chain. 

Demand planning, cost modelling, and projections for sales and operations are being integrated across many supply chain verticals to improve operational and financial performance. Real-time monitoring and forecasting combined with automated practices are being implemented to drive cost-saving initiatives and allow a more responsive supply chain. Workflow analysis and the ability to access up-to-the-minute information have become essential components of planning and execution. 

Staying ahead of data such as price changes and fluctuating lead times means that companies can make agile, data-driven decisions allowing supply chains to  function faster and at a lower cost.

How we help supply chains to gain deeper visibility

Risk mitigation may be an effective solution for large organisations, but small and mid-size logistics companies may not have the resources needed to compile an in-depth analysis of their operation. This can leave some businesses at a disadvantage; typically the data is stored, but without the tools to extract and monitor information. Essential KPIs or opportunities can remain unseen. 

For example, ex-works prices and lead times presented by suppliers have long been accepted as part of the supply chain process, but with insights that can compare and analyze real-time data, new opportunities and financial benefits can be readily uncovered.

At Trym, we provide meticulous statistical analysis to give visibility into key points of the supply chain. Product availability and fluctuating demands are managed with simulated models to gain deep insights into difficult or unique challenges. Using a combination of historical and empirical data, we help supply chain leaders stay ahead of strategic production points or predict shipping delays with accuracy, while effectively managing activities like stock ordering or goods transportation. 

Analytical insights have the power to improve sustainability, and our data-backed models create a more dependable and agile environment in which to operate. For companies concerned with transporting and importing goods to UK warehouses, the ability to make informed choices while mitigating risk means real reductions in both lead times and cost.

Simulated risk scenarios combined with calculated projections based upon historic profiles predict upcoming events that will give rise to changes, disruptions, or fluctuations. Multiple changing scenarios may be reviewed quickly, and using intelligent and data-supported decision-making, we empower supply chain leaders to make strong contingency plans against unexpected events, and identify the optimal course of action in any situation.

Start your journey towards an agile and productive operating environment today, and contact the team at Trym.