Supply chains today are more complex than ever before, which means that supply chain disruptions can have ripple effects felt around the world.
While things have settled down from pandemic-induced shortages, geopolitical conflicts, infrastructure problems, and increased demand for key materials can still produce sudden shocks across the broad ecosystem of suppliers. Even with this return to more normal operations, creating a resilient supply chain ecosystem is essential.
From identifying alternate suppliers to more rapidly assessing potential problems, building a more effective operation and supply chain management system starts with understanding and strengthening your supply chain ecosystem.
What Is a Supply Chain Ecosystem?
A supply chain ecosystem is a network of organizations that work together to create the processes needed to source, design, produce, and deliver products to customers.
Supply chains are highly interdependent on ecosystem partners, including:
- Suppliers of raw materials and components
- Manufacturers to create products
- Logistics to transport, store, and deliver goods
- Distributors and wholesalers to stock retailers
- Retailers that sell directly to customers
The success of a supply ecosystem requires tight integration — and management — of supply chain processes and effective communication between these partners.
Key Components of a Supply Chain Ecosystem
Seven components typically make up the supply chain process.
- Planning: Forecasting demand, determining production levels, and coordinating resources to meet customer requirements.
- Information flow: The systems and technologies to manage and share data across the supply chain.
- Sourcing: The process of procuring raw materials, components, and services from suppliers to support production activities.
- Inventory: Managing raw materials, works-in-progress, and finished goods to ensure adequate supply while minimizing carrying costs.
- Production: The manufacturing processes required to transform raw materials into finished products.
- Transportation: The supply chain management logistics involved in transporting materials and goods across the supply chain.
- Return of goods: Reverse logistics for handling product returns.
Steps to Build Your Supply Chain Ecosystem
Here are some of the key steps in building a robust, resilient supply chain ecosystem to future proof your business, mitigate risks, and provide a competitive advantage.
Assess Your Current Supply Chain Capabilities
Conduct a detailed analysis of your current supply chain strategy and processes, identifying areas that need improvement and can be optimized.
Your product design and process design should account for the flow of materials and information throughout the network to help you make better decisions. To better understand your risks and potential vulnerabilities, you need to map your supply chain network.
A supply chain map is a visual representation of your supply networks from start to finish. This involves four key steps:
- Identifying everyone involved in the supply chain
- Mapping the flow of goods and information throughout your ecosystem
- Analyzing the supply chain for opportunities for improvement
- Developing supply chain strategies to optimize performance
Identify and Engage with Key Stakeholders
Building a supply chain ecosystem requires collaboration and integration among all stakeholders involved.
Once you’ve mapped your supply chain, establish clear communication channels and standardized processes for sharing information, resolving issues, and making decisions across the chain. This helps align inventory levels, production schedules, and demand forecasting with key suppliers and customers.
Integrate Digital Technology for Enhanced Visibility and Collaboration
Collaborative digital tools enable more seamless data exchange and coordinated planning among supply chain partners. A centralized, digital supply chain platform eliminates data silos and manual calculations. Artificial intelligence and machine learning can help monitor supply chains and surface potential issues.
You also need real-time data for efficient management. Technology such as the Internet of Things (IoT), sensors, and warehouse automation provides real-time visibility and traceability to optimize supply chain operations. Technology will be at the center of your supply chain asset management, inventory management, and logistics.
Prioritize Sustainability and Ethical Practices
A Harvard Business Review analysis says customers today have shifted their thinking about sustainability. It’s no longer just a “nice to have” option, but a significant factor in customer decisions. To capture increasingly fickle customer loyalty, companies need to work with their supply chain ecosystem to reduce carbon emissions, minimize waste, and adopt eco-friendly policies across the chain.
Developing a code of conduct for ethical practices, such as fair labor, human rights protection, and responsible sourcing of raw materials is also a key part of the equation. Making sure suppliers comply with your standards and conducting regular audits can help prove your company’s commitment to sustainable, ethical practices.
Build Resilience and Agility
A solid supply chain ecosystem will also include contingency plans and risk mitigation strategies to address potential disruptions. Natural disasters, global conflicts, and fluctuating demand can all impact even the most resilient supply chains. You need a way to quickly assess any bottlenecks and respond to changing market conditions.
For most companies, this means developing multi-layer supply chains to diversify your base or use alternative suppliers and distributors. A proactive approach means you won’t be left scrambling along with everyone else when there are supply chain disruptions. This is especially important in modern supply chains, where one malicious actor can disrupt hundreds or thousands of downstream businesses by targeting one link in the chain.
Establish Key Performance Indicators (KPIs)
Supply chain ecosystems are rarely static. As such, building a robust supply chain is an ongoing process that requires continuous monitoring. Establishing clear KPIs to measure each part of the supply chain can help you figure out what’s working and what isn’t.
By regularly assessing the performance of your supply chain ecosystem against industry benchmarks and KPIs, you can identify areas for improvement and implement corrective actions or optimization strategies.
Partner With Leaders in Supply Chain Accuracy
The right tech and platform strategies can have a positive impact on your logistics and supply chain management, improving your risk management and creating a seamless workflow.
Surgere is an industry-leading SaaS company that provides solutions for the most demanding supply chain challenges. Leveraging IoT technology, RFID, Bluetooth, UWB, and WiFi with hardware, Surgere software provides the real-time intelligence you need to drive optimal operational decisions.
Contact Surgere today for a demo and see how we can help you build a more resilient supply chain ecosystem.
