A recent LinkedIn post by Kristen Morneau is an informative and timely reminder that diversifying supply chains can help mitigate disruptions. This is certainly a long term strategy which must be driven by upper management. Consider the complexities of finding new suppliers that can meet your standards, offer competitive pricing, and then smoothly integrate into your supply chain.
Logistics is tactical in support of supply chain strategy, so must be able to adapt to the planned diversification. The textbook terms nodes and links are descriptive in logistics and supply chain discussions. Nodes are fixed locations such as factories and distribution centers. Links are Logistics Service Providers (LSPs) which connect the nodes from pick up (first mile), through line-haul operations (middle mile), to end user delivery (last mile). The links include ocean and air carriers, freight forwarders, truck lines, integrated parcel systems, customs brokers, and possibly 3PLs. It is easier to change links than nodes. However, if diversification is to reduce supply chain disruptions, both nodes and links must be strengthened.
New suppliers should be evaluated for their export compliance and ability to perform first mile tasks. Vague or incomplete commercial invoice descriptions, for example, can cause customs delays. New LSPs can make or break supply chain strategy. Consider their services as “value adds” rather than just cost. Consistent performance is more important than rates when new links are utilized in your supply chain.
Diversifying any supply chain requires time, a complete project plan, upper management commitment, and attention to detail.
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