29 March 2016

How to strengthen your supply chain operations performance

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Today's global corporations face risks that range from price fluctuations, currency volatility and market changes to those that are beyond our control such as natural disasters. To counter supply-chain disruptions, organisations must apply mature operations and risk management practices to reduce their exposure to these risks and maintain a competitive advantage.

The questions you need to ask are:
  • In the face of these supply chain risks, how does your company prepare?
  • What are the most innovative ways to manage and mitigate risks?
  • Who is responsible for managing them?

Let’s take a look at Nissan’s case, where to succeed in a complex and changing environment, companies need to deploy capabilities along with supply chain management and risk management dimensions. Nissan is an automobile company who is the third largest in Japan. In March 2011, 80% of Nissan’s auto plans suspended production due to 3 risk factors: first was the earthquake, then the tsunami that followed, thirdly was the nuclear environmental disaster. In the 6 months that followed, Nissan’s production in Japan was down 3.8% compared to an industry total of 24.8%, but at the end of the year, Nissan managed to increase its production to 9.3%. How did Nissan recover and manage successfully a disruption of this magnitude? How did Nissan protect their stock performance? What did they do in order to counter those risks?

Nissan implemented a few strategies that may have helped their organisation overcome these disruptions including; deploying advanced capabilities and envisioning what their supply chain position looked like, using flexibility in their supply chain structure, centralising their planning and execution, preparing a business continuity plan whilst at the same time managing to protect their brand by linking their customer value proposition to their operations strategy. 

But what can we learn from such a case study? Companies need to assess their principles, approaches and risk mitigation methods ahead of time in order to plan and manage supply chain risks and reduce the impact when it occurs.

Managing risk is not only about operations and supply chain management but includes every aspect in a CEO’s sphere of influence for product design, development, operations and sales. Hence, companies who are investing in supply chain flexibility, risk segmentation and risk management processes are more resilient to disruption.

To read more about how to make the right risk decisions to strengthen your operations performance, click here.

The best part of my job as a Conference Production Manager is to create and manage my own conferences from concept to delivery, identify future conference topics as well as giving me a chance to expand my business card collection. Having a bit of a sweet tooth, you will always find me having lollies on my desk or you will catch me browsing on fashion sites during lunch breaks.

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