04/24/2024 | News release | Distributed by Public on 04/24/2024 02:05
Welcome back to our Infor blog series that provides key strategies to help mitigate disruptions in your supply chain. In my previous blog, we explored nearshoring as a strategic response to manage disruptions, which enhances supply chain resilience, flexibility, and responsiveness by reducing lead times, improving visibility, and offering potential cost savings.
Redundancy is another important strategy to address supply chain risk. In the world of supply chain management, redundancy is not a sign of inefficiency. Instead, it's a strategic move to ensure business continuity in the face of unexpected disruptions. The recent tsunami in Japan, which caused auto and electronics parts shortages, is a stark reminder of the importance of having redundancy in supply chains. The disruptions rippled through the global auto supply chain given Japan's prominent role.
It's also important to mention that redundancy and nearshoring are not mutually exclusive strategies to mitigate supply chain disruption. Many organizations find that employing both helps limit overall supply chain vulnerability. Nearshoring can bring the goods and services closer to the end customer, which can be complimented with a redundancy plan that provides multiple sources for raw materials and helps safeguard against breaks in a company's supply chain from unforeseen events.
Redundancy in supply chain refers to the practice of having backup options or alternatives in place to ensure the continuity of supply chain operations during a supply chain crisis. This could mean having multiple suppliers for a single component, maintaining buffer inventory, or having alternative transportation routes.
Without redundancy, a single point of failure can disrupt the entire supply chain, leading to production halts, increased costs, and loss of customer trust. For example, rare earth minerals are critical for many modern technologies, including electronics, renewable energy, and defense systems. China dominates the global production and processing of rare earth minerals, accounting for over 60% of the global supply. Any disruption in China's rare earth supply, whether due to policy changes, trade tensions, or environmental issues, can significantly impact numerous industries that rely on these specialized materials. This single-source dependence on China for rare earth minerals has led to concerns about the vulnerability of global supply chains and the need for more diversified sources of these critical resources.
Creating redundancy in your supply chain involves a multi-faceted approach:
Implementing these redundancy strategies can help companies create a resilient supply chain that can withstand disruptions and ensure business continuity. Remember, in today's volatile business environment, redundancy is not an option - it's a necessity!
It's important to choose the right technology from a trusted provider to support your supply chain risk mitigation strategies. Infor is a global leader in cloud software solutions built for companies in industry-specific markets, including Distribution. Over 60,000 organizations worldwide rely on Infor to help overcome market disruptions and achieve business-wide digital transformation.
Infor Distribution software is a valuable tool used to support supply chain redundancy strategies. Its robust capabilities allow businesses to easily diversify their supplier base, implement multi-sourcing, maintain strategic inventory buffers, and establish alternative transportation routes. It also features advanced analytics that provide real-time visibility into supply chain operations, enabling businesses to manage risks and proactively respond to disruptions.
Learn more about Infor's expertise in the Distribution market.
Stay tuned for the next installment of our Strategies to Mitigate Supply Chain Disruptions blog series. We will explore another aspect of ensuring supply chain resilience: Investing in Supply Chain Visibility Software.