Companies need multi-shored supply networks, multi-sourcing, parallel modes of transportation, and concurrent or redundant logistics operations.
A report from parcel delivery firm DHL identifies four ways that companies can bolster their supply chain resilience, saying that diversifying operations can help cope with geopolitical crises and other recent developments.
According to the German company’s “Supply Chain Diversification” study, the four target areas are: multi-shored supply networks, multi-sourcing, parallel modes of transportation, and concurrent or redundant logistics operations.
“The events of the last years have shown us the importance of resilient supply chains and companies adapting their global supply networks accordingly,” Katja Busch, Chief Commercial Officer and Head of DHL Customer Solutions & Innovation, said in a release. “At DHL we are committed to supporting our customers in staying resilient in a sustainable way by providing tailored solutions, sharing best practices, and facilitating collaborative initiatives.”
The report—which was developed by DHL in collaboration with Emeritus Professor Richard Wilding OBE, a specialist in Logistics and Supply Chain Management—defines the four dimensions as follows:
- Multi-Shoring: This involves spreading manufacturing and supplier locations across different regions or countries to mitigate risks. It includes duplicating manufacturing capabilities and using the same supplier in different locations.
- Manufacturing & Supplier Network (Multi-Sourcing): Expanding the network to include redundant suppliers and manufacturing capacities to address financial and operational risks.
- Modes of Transportation: Utilizing multiple transportation modes simultaneously, covering all stages of transport, including first mile, long haul, and last mile, to diversify routes and reduce risk.
- Logistics Operations: Expanding logistics infrastructure to include additional functions like hubs, warehouses, and distribution centers. This may involve adding redundant capacity nearby and outsourcing certain logistics activities for diversification.
In addition, the full report offers tangible customer case examples, so readers can assess their own companies’ diversification levels and devise suitable strategies to improve, DHL said.
Source: www.dcvelocity.com
