Supply Chain: Re-Shoring, On-Shoring, and Buffer OptionsLeave a Comment
“However beautiful the strategy, you should occasionally look at the results.” -Attributed to Winston Churchill.
For the last few decades, “off-shoring” (basing some of a company’s processes or services overseas, to take advantage of opportunities to lower costs), “vendor simplification”, and “just-in-time” (reducing stocks of raw-materials, work in progress, and finished goods within operating processes in order to free up working capital and improve cash-flow) have been basic strategic workhorses in the field of supply-chain management.
However, one of the longer-term impacts of the recent pandemic will be a rethinking of the ways in which overseas supply lines and lean inventory practices open organizations of every size (from small businesses to entire nations) to risks of supply-chain failure, and consideration of re-shoring, on-shoring, and buffer options.
For some companies, this strategic reassessment was already underway: The Kearney Reshoring Index, which measures global production strategies of US firms, shifted significantly in 2019, long before “novel coronavirus” became part of the standard lexicon, driven by changing US import policies and resulting trade-wars.
Either way, many of our clients, across a surprising breadth of industries, are telling us that they underestimated the risks in their supply-chain. After experiencing business disruption due to shortages of the supplies and materials that they need to operate, they recognize that this may not be the result of the proverbial “black-swan” of the pandemic. Climate change, geo-political instability, growing social cause awareness, shifting regulatory environments, technology, and rapid and large swings in commodity prices are just some of the factors that now need to be considered.
Such fundamental reevaluation is not straight-forward, and even knowing where to start can be intimidating, which is why Core Catalysts has a tried and tested Rapid Supply Chain Assessment ™ methodology that can be utilized to help you.
We can pull together a team of professionals with deep industry-specific experience to help you identify and address critical supply-chain risks and issues, enhancing critical processes and increasing your supply-chain agility while managing lead-times, value-chain, and S&OP concerns across sourcing and procurement, operations / manufacturing, logistics / warehousing, and people, processes, systems, facilities, and assets / equipment, taking both short, medium, and long-term points of view, tailored to your specific needs.
Specifically, we can help you:
- Risk-assess and tier suppliers and vendors, and identify and enroll local options, and alternatives and contingencies for critical components, operations, and logistics routes
- Model alternative demand / supply scenarios and their impact on capacity, revenue, profitability, and operations
- Plan and execute transfers of production and service delivery assets and operations from offshore locations, or within the US
- Review key supply-chain processes, including inbound, outbound, and tracking / tracing practices
- Model the impact of changes to inventory positions, both financially and operationally, to identify and minimize the impact of safety stock / forward buying
- Plan for reductions in range of offerings and reduce product / service complexity, while optimizing returns for all stakeholders
- Formalize and streamline product / service allocation processes for constrained assets and supplies
- Anticipate consumer, customer, and market changes
- Identify public health and safety-critical issues
- Ensure alignment and awareness upstream and downstream with your supply chain
We execute each project with the end goal of generating value for your company in key areas including revenue and profitability, risk mitigation, service and quality management, and regulatory compliance. Deliverables can include benchmarking and performance goals relative to your industry, quick-win opportunities, and longer-term road maps and execution plans planning for performance enhancements, including capital and human resource considerations.
The insights you will gain from a Core Catalysts Rapid Supply Chain Assessment ™ can help you determine where attention should be focused and to balance resiliency, cost, and efficiency priorities within your supply-chain to ensure your business continuity for the next “black-swan” event.
If this sounds of interest to you, or you would like to find out more, just give us a call!
– Mark Jacobs, Client Service & Delivery