MPact » Industry

5 Strategic Directions to Fortify Your Supply Chain


By Trent Bester, Senior Vice President, Consulting

Supply chain reliability has been a challenge for most of the past decade due to a variety of geo-political, economic, and environmental forces. COVID-19 didn’t create the problem, it revealed it.

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  • Refashion your operational and supply chain strategies to cope with disruptions and minimize cost.

  • Consider bringing your supply chain closer or producing some of your own inputs to reduce risk, shipping times, and in many cases, logistics cost.

  • Strategic operational choices should focus on building more enterprise resilience and adaptability.

Over the last decade, there was already plenty of evidence companies had been reconsidering the design and location of their supply chains. American companies such as Apple, Caterpillar, Whirlpool, and Merck & Co. had already reshored parts of their supply chains back to the U.S. for a variety of business reasons. In Canada, research for Canadian banking clients showed that certain software development services, like testing, could be delivered in Canada at a lower cost and risk profile versus India.

Over the last decade, there was already plenty of evidence that companies had been reconsidering the design and location of their supply chains. American companies such as Apple, Caterpillar, Whirlpool, and Merck & Co. had already reshored parts of their supply chains back to the U.S. for a variety of business reasons. In Canada, research for Canadian banking clients that showed that certain software development services, like testing, could be delivered in Canada at a lower cost and risk profile versus India.

The growing realization in many industries and companies is that going offshore does not automatically bring cheaper, higher quality goods and services. Canadian manufacturers, business services firms, and retailers need to be thinking hard about their future supply chain and operational strategies.

This is of particular significance when considering the next couple of years may not be much rosier. An overall slowdown in the global economy can further depress consumer spending and business investment, triggering an extended recessionary environment. The challenging state of government finances right now can easily result in higher taxes or interest rates tomorrow, further dampening a recovery. Finally, looming on the horizon is the contentious China-U.S. trade relationship increasing the complications of supply chains and raising costs.

In these difficult and uncertain times, prudent companies will want to refashion their operational and supply chain strategies to cope with disruptions and minimize cost. The CEO and COO’s imperative should be on increasing enterprise resilience and adaptability – and ultimately creating a platform for renewed, profitable growth.

Fortunately, leaders have a variety of strategic choices available, five of which are summarized below :

Repatriating part or all of your supply chain

Bringing your supply chain closer or back to Canada reduces business risk, shipping times, and in many cases, logistics cost. If reshoring to Canada is not possible in the medium-term , consider producing some of your inputs within your firm or together with local partners.

Move more services and operations online

Not only will automation and web-based processes improve operational robustness, but they can also lead to significant efficiency cost savings, fewer errors, and improved service levels.

Diversify your vendor list

In these uncertain times, spread your buying around, particularly for inputs or services that can make or break your business.

Redesign your products, services, and process

Designing in simplicity across many dimensions can enable companies in times of crisis to respond quickly to customer, production, or supply chain demands while keeping costs as low as possible.

Move to an adaptable work force

Cope quickly with an adaptable, engaged, and skilled work force who possess a generalist skill set, have access to the right tools, and the autonomy to deploy them.