Five Expert Recommendations for Navigating Global Disruptions to Foster a Resilient Supply Chain

As many of us painfully learned during the COVID-19 pandemic, much of our everyday functioning relies heavily on the health of the supply chain. Interruptions to the supply chain can have a significant impact on our daily lives, and unfortunately, many of those stressors are out of our control. But, there is good news. As supply chain professionals, we can take proactive steps to improve how we handle potential bottlenecks and complications. 

Our very own Tony Wayda, Principal here at JBF, had a quick chat with Cornerstone Edge founder, Brian Carlson about how supply chain professionals can effectively navigate transportation risks and global disruptions and their effect on the supply chain. Read below for a breakdown of their discussion, or click here to watch a recording of their conversation.

• Conduct Annual Risk Assessments

  One of the reasons global disruptions have such a powerful impact on supply chain operations is that it can be difficult to predict just how much geopolitical tensions or natural disasters will truly affect a business. As such, operations don’t always have dependable plans in place to fall back on when the unexpected occurs. But with annual risk assessments, operations can have a better idea of what they are equipped to handle and what needs to change. These assessments can provide businesses with a roadmap to how to best address a variety of scenarios. This also allows them to proactively tackle any issues they find during the assessment, so they’re not left with any nasty surprises when the worst happens. 

• Diversify Your Vendors

  Many companies are still relying heavily on single-sourcing from countries like China. As we learned from recent events, like disruptions with the Suez Canal and the Red Sea, relying on a single source can be extremely risky. Engaging contract manufacturers in multiple countries, like Vietnam, India, and Mexico, is a great way to diversify manufacturing and assembly locations, giving your business additional layers of protection during times of uncertainty. 

• Explore Nearshoring

  Some businesses may rely exclusively on container shipping from APAC, which can come with significant burdens, such as unforeseen delays and rising costs, especially during peak season or geopolitical disruptions. While the upfront cost may be significant, looking into nearshoring alternatives for manufacturing, such as LATAM, may be of benefit. Transportation costs from LATAM to the U.S. are typically lower, with options like cross-border trucking and intermodal transport, and those savings can quickly add up. 

• Expand Manufacturing Footprint

  Cost constraints can be a significant hurdle when expanding a manufacturing footprint. While diversifying manufacturing locations to reduce risk is critical, the initial costs for setup and operational adjustments can be a substantial investment. Consider the long-term cost savings and take a macro approach to the business. Long-term cost savings through reduced dependency on APAC and lower transportation expenses can help offset initial expenses. For example, shifting some manufacturing to LATAM can reduce reliance on long-haul shipping and avoid costly air freight, particularly useful during demand surges or supply chain disruptions.

• Invest in Adaptable Software

  While many of today’s technologies improve supply chain visibility, they don’t always empower operations with the flexibility and intelligence to respond quickly to disruptions. Adaptable software that enables alternative lane analysis, flexible production shifts, and enhanced supplier ramp-up capabilities can greatly increase agility in uncertain times. Tools like "supply chain towers," powered by Artificial Intelligence (AI), provide predictive insights to identify potential transportation needs in response to geopolitical risks, allowing for proactive adjustments. 

Resilience is key to a successful supply chain. Taking these steps will not only protect against future bottlenecks but also foster a more agile and robust supply chain capable of sustaining growth and customer satisfaction, no matter the challenges ahead. Reach out, and let’s see how together, we can find the road that’s right for you.