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Supply Chain Management - A Key Approach For Product Distribution

You need to ship a large amount of product from point A to point B. Seems simple enough, right?

Well, we only need to look at the great toilet paper panic of 2020 to understand that the global supply chain is simultaneously more fragile and more resilient than the public realizes. And while there was much worry over potential shortages of essential products during the course of the pandemic, virtually none of these shortfalls came to fruition.

Effective supply chain management is essential to ensuring that products around the world can be distributed properly. Product availability ebbed and flowed over the course of the last year, but the global supply chain didn’t break - even in the face of a pandemic.

Part of the uncertainty around product availability and the worry of supply chain interruptions stems from the variance in quality of suppliers that organizations hire to facilitate distribution. Essentially, wisdom dictates that a company’s logistics network is only as strong as the suppliers appointed to handle it.

Read Also: 10 Key Points to Consider When Searching for a Contractor

Organizations recognize this. To mitigate risks that could impact their competitive advantage, supplier prequalification is vital to ensuring the right contractors are hired for a work project. Not only does this verify that suppliers are following an organization’s standards and protocol, it also helps determine which contractor is best for a specific task within supply chain work.

Read Also: Contractor Prequalification: An essential element of risk management and success planning


The Future of Distribution - Being Proactive Will Be Crucial

As a result of the pandemic, uncertainty surrounding global supply chain strength caused many organizations to reassess and reconfigure their approach to anticipate potential disruptions.

Cognibox Vice President, Operational Excellence Denis Sanchez points out that “moving forward, the focus is not on resilience, but rather on ‘pro-silience’ - how to anticipate and manage disruption proactively.” And that’s not just a matter of preparing for unforeseen events - it’s also about using effective tools for tracking and monitoring disruptions and measuring supplier performance.

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That means big data will play an important role for companies looking to refine their supply chain philosophy. We’re already seeing an increase in organizations looking to invest in technology that provides them this data.

Cybersecurity as a means of protecting the supply chain network is also seeing an uptick in adoption for companies that want to safeguard against external threats.

“Probabilistic approaches like discrete-event simulation and measuring multi-tier suppliers by risk factor will also be important,” Denis adds.

The key takeaway here is that we’re seeing organizations using dedicated supplier management tools to get in front of any potential disruptions before they become an issue.

So while it may seem like a simple task to move product from one point to another, remember the complex ecosystem and technology that maintains and supports the global supply chain.

Want to read more of Denis’ insights on supply chain management? Read his article with the Institute of Supply Management.

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