Single Sourcing, Supply Chain

Recently I came across an interesting article in Supply Chain Digital titled: “Why are global supply chains becoming more fragile?”

It cited a number of examples of supply chain failures and suggested that one of the factors that play a large role is the trend for single sourcing. In particular, the dependency of complex manufacturers on traditional ERP systems.

Recently ASDA, the major UK supermarket retailer, suffered a technical problem with card transactions. This issue brought many stores to a standstill.

The dependency on company-wide IT systems is not new in supply chains.

As supply chain professionals, we often focus too much on the physical flow of material. We do not engage closely enough with our colleagues in other functions, such as IT and finance etc to ensure the systems they operate have the agility and robustness to support the supply chain.

Given that most global supply chains now link not just across one company but from company to company, across from supplier to customer and down to logistics service providers, it is even more essential to avoid “single sourcing” through one system or component. It’s easy to propose that cloud platforms are the solution, but dependency on one cloud platform can be just as risky. Many companies’ IT security policies also rightly control the sharing of information across multiple systems to ensure security and accuracy of information as much as their agility and reliability.

A balance has to be struck, and it is increasingly the supply chain professional who has to engage across a wide range of functions and organisations to ensure that this is achieved.

Have you ever experienced significant supply chain failures from systems outside your immediate control? What actions are you taking to identify and address these weaknesses? What solutions have you tried and found to work?

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