We are living in the era of
turbulence and chances are more we will experience the more turbulence in near
future because the world has now become so globalized,uncertain and complex.the
uncertainties may arise form different sorts of areas where some areas are able
to control and some aren’t. such as terrorism, natural disaster.the most
important question which comes into mind. “Will the Traditional Supply chain
models be suitable to meet the challenge of uncertainty?” of course not because
these models were created under the assumption of stability. so what should we
do in order to mitigate this risk. here are some approaches which can help to
deal with turbulence
Approaches for dealing with turbulence
The concept of traditional Supply Chain were based on the dynamic flexibility
which is not suitable for the uncertainty or to deal with turbulence. Hence
there is a need to convert this concept into structural flexibility. The first
step which should be taken is to really understand the sources of variability
and built simple model that can help to mitigate the risk because there is a
uncertainty there is a risk so let us go through these aspects in more detail.
Embrace volatility do not fight it
as we know uncertainty and turbulence create risk but here is the most important
thing which most of them usually ignore is that risk provide opportunity. it is
very difficult for us to change the uncertainty but what we can do is that we
can manage the exposure of risk. In order to manage the exposure of risk first
we will have to accept the turbulence . so do not fight but try to understand
its impact. which would be possible when we will focus on the solution rather
the problem.
Understand the nature and the impact of turbulence
Not all the firms are equally affected by the impact of turbulence therefore,
top management should understand how changes in demand and transportation cost
might affect the profitability of their Supply Chain structure. whether the
demand should be met by outsource “surge” or produce in house what is the right
way to go.
Challenge the economies of scale mindset
big is not always beautiful.. small scale facilities can also have a range of
benefits. and Toyota is the good example of this. As kanji isshi formerly
Toyota's head of the NUMMI plant in California, and now president of Central
Motors confirmed that Central motors is being used as a experimental lab in
which most of the researches is being made on how to work efficiently at small
scale and they achieved astonishing result that central Motors produces one of
the main model of Toyota which is know as Corolla. Toyota believe that if the
production can be made on a small scale in Japan so it can be at any market as
well. In other words we can say that Toyota Logic is simple “Local for Local” to
produce the units that serve regional market with local product
Conclusion
These are the tips which can be helpful to mitigate the uncertainty. every risk
comes with opportunity so we should try to find the opportunity which can turn
the weakness into favorable situation. hence it is impossible to build the
supply chain structure on the basis of single commodity price this new era
demand us to think in different way with new mental framework in order to manage
the supply chain in a turbulence.