The missing ingredient in supply chain risk management

Alisha Gallagher

Joan Cullinane is a master of reinvention.

She’d been working as a mechanical engineer at companies like HP and Oracle for nearly 20 years when she decided it was time to transform her understanding of her job, company and industry. So she went back to school and earned a doctorate of business administration (DBA) in supply chain management.

As a result, she’s reinventing the way Oracle is navigating manufacturing challenges as vice president of supply chain, manufacturing and operations, and is on a path to influence the manufacturing industry through her research.

Joan joined the CEO of Instrumental, Anna-Katrina Shedletsky, on a recent podcast episode of Change Notice. She shared advice on responding to supply chain disruptions and the key to developing resilience: strong relationships with suppliers.

The inherent risks in manufacturing

Joan is quick to acknowledge that although recent supply chain disruptions have negatively impacted products, companies and consumers, disruptions themselves aren’t new to manufacturing.

The 2003 SARS epidemic and the 2011 flooding in Thailand influenced the global economy and caused ripple effects through the supply chain — much like the COVID-19 pandemic and subsequent labor shortage. The crisis might be new, but according to Joan, the inherent risk is not. Understanding that disruptions are a consistent variable allows manufacturing leaders a chance to accept this inherent risk and better position their companies to withstand them.

The key to building resilience in an unpredictable supply chain

In her doctorate research, Joan studied risk management and the factors that increase resilience to supply chain fluctuations. She discovered that although risk management infrastructure is helpful, the development of strong relationships, specifically benevolence, between parties in the supply chain is a stronger indicator of successful resiliency to disruption and unpredictability.

What exactly does benevolence in action look like? Any action that builds trust. While it’s common for product engineers to order extra parts or components to mitigate supply chain or manufacturing issues, this tendency is the result of an inherent mistrust of the supply chain and/or supplier. In turn, this may force the supplier to prioritize one customer over another, which could lead to longer lead times and additional doubt between the supplier and its customers.

Joan explains that if customers are mindful of their suppliers and only order what they actually require, then trust can develop. This benevolence allows suppliers to provide parts to all their customers and begets resilience within an unpredictable supply chain.

“If there was ever a time to have an emotional quotient, you’ve gotta have it now,” said Joan. “[You] really need to be a partner and be … someone that’s truly invested in your supply chain.”

3 strategic responses to supply chain disruptions

While benevolence might be one research-backed factor to risk management in manufacturing, Joan suggests three additional methods.

  1. Diversify suppliers: Benevolence can take you far, but if it’s all invested in one supplier, you’re still at risk. Intelligently diversifying suppliers will make you more nimble in the face of supply chain disruptions.
  2. Adopt creative tooling: Conduct an honest assessment of your tooling process. How could you reduce cost? Do you need hard tooling? If you’re unsure, it might be time to explore creative answers.
  3. Put data to work: Figure out what data you already have, and create new systems that help your teams use that data to cut through the emotion and the noise. This will help you determine what is actually happening on your lines.

“Why waste a good disruption?”

Winston Churchill is quoted as saying, “Never let a good crisis go to waste,” and Joan has her own version of that: “Why waste a good disruption?”

For her, the current manufacturing and supply chain disruption is the perfect time for manufacturing leaders to reexamine every tool and process, and abandon anything that’s not working. She sees it as a time of learning to prepare for the next disruption, so modern manufacturing leaders can say “I’m ready” while everyone else is saying “I didn’t see it coming.”

For more interviews with manufacturing leaders in consumer and industrial electronics, follow Change Notice on Spotify or wherever you listen to podcasts.

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