In a rapidly changing world, sourcing and supply chain management (SCM) is under more scrutiny than ever. Risk and uncertainty have grown exponentially.
Previously reliable networks of sourcing and supply chains are being questioned, and inflating costs are causing headaches in nearly every sector. It’s become apparent that the longer the supply routes, the greater the fragility and potential for disruption.
Now is the time to implement resilient sourcing and supply chain concepts by considering sustainability requirements with the help of digital enablers. It’s also the time to look closer to home for supply, to ensure that US businesses are less exposed to global economic and societal shocks.
Building a resilient sourcing and supply chain to adapt to the new normal is not only troubleshooting in the short term but also a mid-to-long-term resilient sourcing strategy, incorporating re-shoring considerations and related transportation network. We believe that only a holistic approach including an operating model, operational processes and supplier management will deliver a resilient supply chain.
We recommend five critical data-driven actions to overcome the growing challenges of sourcing and supply chain management:
- Risk baselining of direct material spend and your current supplier portfolio
- Leverage artificial intelligence to identify alternative materials, technology, and new/alternative suppliers to re-structure sourcing strategies
- Define smart steering model and KPIs to measure and monitor sourcing and supply chain resilience
- Implement data lake including 3rd party risk data to create a sourcing and supply chain data hub
- Build advanced analytics capability to enable a steering model of resilient and sustainable sourcing and supply chain
We also recommend that US businesses look to adopt the ‘local-to-local’ principle. This means carefully assessing and selecting North American suppliers who can help them to build shorter, simpler, more robust supply chains, bringing greater reliability and reduced exposure to global shocks.
One key aspect is the identification and qualification of new suppliers to set up more resilient sourcing strategies with the help of artificial intelligence:
Information inquiry and technology profiling
After baselining spending and supplier portfolio a comprehensive technology questionnaire for three pilot categories of packaging material was used to set up the search case in the innovation Intelligence-System PATEV.
Include alternative sources in the sourcing strategy
The results were analyzed and jointly validated by experts from the client and BearingPoint. Follow-up assessments and deep dives for alternative technology and/or suppliers were conducted to summarize results in a category playbook for the dimensions of sourcing strategy, technology, sustainability, supplier and supply chain risk and procurement processes.
Define resilience targets and measure implementation
A list of recommendations is derived from the category whitepaper and was mapped to the overall resilience KPI. An implementation roadmap, considering quick wins, was outlined to monitor successful execution.
Build your resilient sourcing strategy with the technological support of our partner PATEV to identify, evaluate and manage opportunities in finding supply alternatives.
Let’s work together to build a resilient supply chain and thrive in the new normal.
