Ensure the Resilience of Your Supply Chain by Choosing the Right Logistics Partner
Today’s business environment is characterized by dynamic changes and unpredictability. The smooth functioning of the supply chain can be disrupted by so-called “black swans,”or unexpected events with a negative impact on business operations. Sudden geopolitical shifts, pandemics, and extreme weather events — in recent years, we’ve experienced more than enough of them. Therefore, it is crucial for responsible shippers to collaborate with logistics partners who support them in maintaining stability and operational efficiency, even in adverse circumstances.
New Global Challenges and Supply Chain Resilience
The last few years have brought numerous challenges and valuable lessons for supply chain managers. The COVID-19 pandemic exposed gaps in crisis planning, while geopolitical conflicts (Russia’s invasion of Ukraine, renewed escalation in the Middle East, tensions between the US and China) and climate change, which has brought destructive extreme weather events, have highlighted their impact on global logistics and infrastructure.
What is Supply Chain Resilience?
The simplest and perhaps most comprehensive definition of supply chain resilience is the ability of businesses to quickly and effectively respond to disruptions in the supply chain to minimize their negative repercussions and ensure business continuity. Proactive approaches are key, focusing on forecasting potential risks, creating crisis scenarios, and continuously monitoring operations. In practice, this means that a company must be prepared to quickly adjust its transport plans, modify routes, and dynamically respond to unexpected changes in resource or infrastructure availability.
How to Choose a Logistics Partner that Supports Supply Chain Resilience?
Shippers looking for a new logistics partner should include supply chain resilience in the list of factors to consider when selecting a supplier. What should you particularly focus on?
Proactive crisis management approach. By analyzing historical data and current trends, logistics providers can predict potential problems before they arise. A logistics partner should be able to effectively identify possible disruptions in the supply chain, assess the risk of their occurrence, and create action scenarios in case they arise. It is also important to regularly conduct risk analyses, considering not only highly probable events but also less likely yet potentially impactful ones.
Monitoring changes in regulations and other legal frameworks. Changes in the legal environment can negatively impact the efficiency of the supply chain if they come as a surprise to shippers and logistics companies. A reliable logistics partner should continuously monitor ongoing legal changes in the markets where their clients operate and implement the necessary adjustments in advance to be ready when these changes come into effect. This will help avoid costly penalties and delivery delays.
Collaboration with reliable carriers. On one hand, this collaboration minimizes the risk of disruptions due to carrier misconduct, and on the other hand, diversifies transport options in case of situations threatening the supply chain. Long-term relationships with experienced carriers can also positively impact communication quality and better coordinate actions during a crisis.
Open and Transparent Communication: It forms the basis of effectively minimizing the impact of unexpected events on supply chain efficiency. Sharing information with all process participants strengthens collective resilience. Open communication ensures that everyone is fully informed and can efficiently coordinate actions during disruptions.
Speed of response, flexibility, and salability. Unwanted and unforeseen situations require a quick response to promptly implement preventive, corrective, and damage-mitigating measures. Therefore, logistics partners should be prepared to efficiently execute such actions based on pre-established scenarios. The logistics provider must also be flexible to appropriately respond to operational changes resulting from dynamic shifts in the environment during a crisis (e.g., providing ad-hoc groupage deliveries instead of previously agreed full truckloads).