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Mitigating Global Supply Chain Risk Through In-country Services

Last modified: March 23, 2015

In today’s global marketplace, logistics managers grapple with risk, volatility and uncertainty on a daily basis. Major disruptions along the supply chain can result from natural disasters such as hurricanes, earthquakes, flood and tornadoes, or they can result from labor disputes such as the recent lengthy longshoreman’s union strike along the entire west coast of the United States. Moreover, the aftershocks can be damaging for years into the future.

While logistics managers should take a proactive approach to mitigate future disruptions, many companies lack a formal process and resources for analyzing and minimizing risk. The vast network of suppliers across multiple countries and industries make that process formidable. However, this is precisely the function that an innovative, technologically progressive third-party logistics services provider (3PL) offers. Through collaboration, a 3PL provides its clients with strategic risk management plans tailored to address the inherent threats embedded in the supply chain.

Mitigating Global Risk Starts with Specificity and Region Expertise

To begin mitigating risks in the global supply chain, an organization must evaluate the risks specific to its industry, develop appropriate responses to disruptions and determine the processes and technology necessary for implementation. The pitfalls to this process include lack of expertise in compliance, laws, technology, IOR/EOR, and comprehension of the out-of-country points in the supply chain network.

Thus, collaboration with an innovative 3PL with considerable resources and presence in multiple countries and industries represents the most efficient way to mitigate risks in the global supply chain. Flash Global offers a wide array of customizable solutions to end-to-end supply chain issues, and it has connections in over 80 countries through 700 forward stocking locations, 15 distribution centers, IOR/EOR expertise, five regional command centers, and a global team comprised of 35 Six Sigma Green Belts and three Six Sigma Black Belts driven to ensure that each clients realizes the greatest savings along the network.

In order to implement supply chain risk management best practices, logistics leaders must consider demand channel volatility, customer risk and the potential effects of economic recessions. Management priorities must focus on improving throughput and reducing order cycle times, which ultimately leads to a reduction in capital risk exposure. However, along with this economic focus towards the global supply chain, logistics service providers also provide clients with strategic contingency plans in case of other severe events that create disruptions.

The critical element in the process of planning proactive contingency plans includes collaborating with a 3PL in real-world scenario planning and rehearsing for natural disasters and recovery. Thus, companies, such as Flash Global, with predictive analytic capabilities, with corresponding systems that track and evaluate events, will perform better when confronted with a crisis than those companies that had no plans, or who had plans but did not rehearse.

3 Elements That Impact the Degree of Supply Chain Loss due to Disruption

Three other elements impact the degree to which an event will cause losses: communication, discovery and decision-making. The more quickly a company can identify and communicate severe events, the more quickly that company recovers, mitigates the potential losses and produces positive results.

Just as crucial to discovery and communication is the third element of decision-making. Identifying the severity of a disruption and communicating effectively may improve the outcomes; however, if decision-making is slow or poor, the outcomes may be considerable impacted. For example, a one-hour delay in decision-making may result in the product being delayed from its final destination by more than a day. Moreover, higher the potential for negative financial results, the higher the probability for poor mitigation decisions.

Another critical factor to minimizing risks is the global nature of today’s supply chain. In this area, Flash Global is uniquely situated to provide its clients with superior strategies. The company maintains command centers in Japan, the Netherlands, Brazil, Singapore and New Jersey, each operating in the local language and providing local and regional services to exceed the requirements of its clients.

In addition, Flash Global excels in proactive order fulfillment with services that include:

  • Tracking management and reporting.
  • Distribution.
  • Order transmission and processing.
  • Coordination and replenishment of forward stocking locations.
  • Order-to-delivery management, including an alert system for warehouse availability.

Moreover, with FlashTrac, a proprietary global software platform, mitigating risks across the network using in-country services is enhanced between the command centers through electronic order transmission using Web input, XML, phone, fax or email. The system integrates seamlessly with existing infrastructures, and clients can input orders from any location worldwide. These services include:

  • Performance reporting.
  • Back-order processing.
  • Specialized communication.
  • Escalation management.
  • Exception coding.
  • Reverse logistics coordination.
  • Asset recovery, including tracking defective material and return waybill management.
  • Trade and compliance activity.
  • Customer orders.

Flash Global does this expertly with deep knowledge of local and regional regulations, professional staff who speak the local language, expertise in available transportation services and understanding of local geography. For a comprehensive, holistic solution to mitigating risks using in-country expertise, Flash Global provides the leading innovative technology and solutions.

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