Four Key Strategies to Advance Supply Chain Visibility and Resilience

 

What’s keeping large global orthopedic manufacturers and suppliers up at night?

Supply chain visibility and resilience.

This isn’t a surprise, as the supply chain reckoning and global shocks of the last year have revealed true vulnerability in supply bases worldwide. Nearly 18 months after the first supply chain disruptions, many industries are still operating in great uncertainty. In fact, according to research by Gartner, just 21% of supply chain managers are operating a highly resilient supply chain today, with visibility and sourcing agility.

Why? Of course, a lot of the answer has to do with the emphasis on efficiency over resilience in supply chains, at least pre-COVID. And some has to do with unanticipated material shortages, transportation challenges, and capacity limitations during the last year. Yet some reasons can be traced back to a lack of tracking tools for real-time exposure and to gaps in the ability to collect data, gauge risk, and use both to gain insights for decision-making.

Building supply chain resilience is a high priority right now in every industry, including orthopedics, because of the risk of shock from other threats. To shed light on what’s going on in the industry and how we’re handling supply chain resilience, we’ve sponsored an OMTEC 2021 webinar discussion on this topic, How to Build Resilience for the Next Big Supply Chain Interruption. We shared some of the panel insights in our recent blog Building Resilience for the Next Big Supply Chain Interruption. In this part two, we’ll explore four key strategies to advance supply chain visibility and resilience amid ongoing uncertainty.

Understanding supply chain visibility, transparency, and resilience

Supply chain visibility is about a firm’s ability to review, track, collect, and process information throughout the supply chain—and make it available to stakeholders. Visibility actually breaks down into two facets: true visibility, or the ability to collect data from all parts of the supply chain, and disclosure, or the ability to communicate what you’ve collected internally and externally, for compliance as well as coordination and planning purposes.

Closing gaps in the ability to collect data and communicate it are one step. But supply chain visibility also creates transparency, which is ultimately about decision-making that manages risk more effectively. We believe transparency is fundamental to true supply chain resiliency, which is the ability to respond to changes in the market at any level in order to navigate uncertainty and reduce the effects of shock on your business.

Strategy #1: Map the supply base

It’s well-known by now that forecasting and planning have become very challenging over the last 18 months. Without clear visibility into what is happening across the supply chain with an adequate level of granularity, orthopedics firms don’t have a clear picture of supply risk.

Yet creating end-to-end supply chain visibility is easier said than done, especially when budgets and resource restrictions are considered. To increase visibility and mitigate risk, firms and suppliers must get granular, creating supply dashboards, mapping physical flows from their supplier tiers, and staying on top of inventory and performance information. This will enable easier shifts when material shortages or other delays affect sourcing, or when changing timelines could slow down production.

Strategy #2: Prioritize communication and coordination

Unanticipated supply chain shortages and interruptions have been disruptive for manufacturers across industries—and certainly in orthopedics. To address uncertainty, OEMs and suppliers need to work in tighter coordination. This includes staying close to customers to understand demand, respond to it, and smooth the peaks and valleys that can affect production. Doing so helps suppliers, outsourcers, and OEMs manage capacity, adjust forecasting, improve lead times, and better monitor performance.

In addition, dual sourcing, increased capacity buffers, and close coordination can prepare OEMs and their supply base for a fast response to ramp ups and increased production volume. This is where expert supply chain coordination and outsourcing can be an advantage, as it enables the ability to flex and scale with demand without increasing fixed costs.

Strategy #3: Embrace flexibility and adaptability

As traditional planning and forecasting processes fall short, OEMs and suppliers must move to a more flexible and adaptive approach to business planning. Business continuity planning has become a clear priority in the orthopedic industry for 2021. With clear response plans to different scenarios, companies can react quickly to evolving situations or disruptions. This ties in with close coordination with the supply base.

Strategy #4: Upskill and empower

Resilient supply chains are only as resilient as the people managing them. Bolstering problem-solving skills and supply chain management is sometimes easiest, fastest, and least costly through outsourcing to an expert partner with industry perspective. With information and coordination—and with access to this expertise—key supply chain personnel can develop adaptable response plans in continuing uncertainty.

And continuing uncertainty takes its toll. In the OMTEC panel, supply chain leaders discussed the strain of the last year and its effect on employee morale—something to watch as recovery continues, as turnover and retention challenges amid complexity pose additional risks.

Supply chain visibility and resilience are likely to continue to be priorities through the rest of 2021 and into 2022 in orthopedics as well as other industries. By mapping the supply base, coordinating closely with customers and suppliers, embracing flexibility and empowering problem-solving, OEMs can advance resilience in preparation for supply chain interruptions to reduce shock.

At Millstone, we understand the challenges of the orthopedic supply chain and the imperative to meet them. We believe that quality drives patient success and that the expertise of a trusted outsourcing partner can help at this critical time. That’s why we’ve perfected all the capabilities medical device manufacturers need to get to market. Today we offer post-manufacturing and aftermarket services to more than 50 customers, including some of the top 10 orthopedic companies in the world. We are constantly evolving our processes and services to help OEMs achieve sustainable success. We offer clean room packaging, medical device specific warehousing, finished goods distribution, loaner kit management, advanced inspection and reverse logistics services—all with an unparalleled focus on quality.

What could we help you do better? Learn more at http://millstonemedical.com.