Find out about the sophistication and complexity of modern business supply chains.
If you want a quick reminder, you need to look no further than the fruit and vegetable section of your local supermarket.
You will find fruit and vegetables that are currently out of season, or that can’t be grown in your country. As a UK shopper for example, when you read the country of origin on the packaging you can see other European countries, African countries and more distant lands – such as strawberries from Spain and chillies from Kenya.
The modern miracle here is that fruit and many types of vegetable are perishable goods that spoil quickly. They are also delicate and easily damaged. This implies that they must be picked, packaged and shipped quickly from their country of origin and kept in a protective environment until they reach the shelves of the supermarket. The final part of this modern miracle is that this produce is sold at a relatively low price, yet the supermarket is still making a profit. The speed and safety of delivery are achieved within a tight budget.
If we step back from this wonder, we should stop for a moment and recognise that as consumers we can take it for granted that the shelves will be stocked. If a product is not on the shelf because of an issue with the supply chain, we assume we can always pick an alternative product in the same section, or visit a rival supermarket. A consumer can behave in this way, but what happens to the organisations that have failed to get their products onto the shelves?
What if it’s your organisation that has a broken supply chain that may span many countries and thousands of miles of travel? How do you go about fixing the issue, finding workarounds, or preventing it from happening in the first place?
Do you understand the business continuity arrangements of your suppliers? Do you understand the operational risks they face in delivering their products to you? If you’re buying products from overseas, do you know the political stability of the country of origin and the countries which the products will travel through? Do you know the safety of the shipping lanes? Have you analysed the published accounts of these organisations? Have you made arrangements for alternative sources of supply? What about the onward supply chain? Should you analyse the organisations that purchase your products and should you diversify your customer base?
Looking inward at your organisation, does your business impact analysis (BIA) identify the level of dependence you have on the supplier? Do you know the extent to which the loss of the supplier will affect your key products and services?
The consumer only sees the end result of the product or service. The organisation in the supply chain should have a complete view from origin to delivery. Are your organisation’s supply chains transparent to you? Do you understand how, and under what conditions, supply might fail? It’s something to consider when next chopping your supermarket bought chillies from Kenya or slicing strawberries from Spain.