Supply Chain Risk Intelligence: Practical Steps to Build Resilient Operations

supply chain risk intelligence

Supply chain risks, such as disruptions caused by natural disasters and geopolitical events, are a constant reality as long as you’re in business and connected to the global supply chain. Since you can’t avoid these risks 100%, the best course of action is to build a resilient supply chain that withstands risks and thrives in uncertainties. Fortunately, you can leverage supply chain risk intelligence to risk-proof operations and develop supply chain resilience

Read on and learn what supply chain risk intelligence is, its core components, and how you can utilize GAINS to build resilient supply chains using risk intelligence capacity.

What Is Supply Chain Risk Intelligence and Why Does It Matter?

Supply chain risk intelligence is leveraging data and technology to build a resilient supply chain that manages supplier risk more effectively. This system is most effective when data from historical, current, and predicted events is all available for analysis. For instance, analyzing data from past supply chain disruptions yields insights you can leverage to navigate similar disruptions today.    

With artificial intelligence (AI), you can not only analyze data but also use the data to predict scenarios and model solutions based on real-time market conditions. These solutions can then be analyzed and compared to determine the best solutions for potential future scenarios. These strategies help you develop more objective and data-driven solutions and strategies for mitigating supply risks

The entire process of analyzing different supply chain risk data, gleaning insights from it, and applying it to fortify your supply chain operations is collectively called supply chain risk intelligence. It’s a must-have for modern businesses and supply chain professionals who want to achieve and sustain business continuity when facing supply chain disruptions. 

Core Components of Supply Chain Risk Intelligence

These are the key elements that operationalize supply chain risk intelligence:

Data Integration and Visibility

The first component of supply chain risk intelligence is the integration of relevant supply chain risk data into the decision-making process. It includes critical data points, such as historical, prevailing, and projected market demand, and lead time. Data integration supports real-time supply chain visibility, which helps you make swift and accurate decisions that expedite the supply chain process.

For instance, you can leverage advanced data analytics techniques like machine learning and artificial intelligence for effective demand planning. This way, you can stock up early or source new suppliers so you maintain operational continuity during demand spikes. 

On top of early risk identification and mitigation, supply chain visibility also enables you to:

  • Satisfy regulatory compliance obligations
  • Optimize your supply chain process to enhance operational efficiency
  • Streamline and modify your supply chain process to match changing market demands

Predictive Analytics and Machine Learning

These AI-driven technologies offer more proactive and data-driven solutions to supply chain disruptions. They empower you to design preventive strategies and solutions rather than reactive efforts. For instance, you can leverage AI demand forecasting to predict risks, such as peak season demand, that can cause inventory shortages, and then organize accordingly. 

Additionally, using machine learning (ML) helps you identify internal or external patterns in your supply chain process that weaken operational efficiency. For example, if you discover that certain products take more lead time, you can examine your order fulfillment process step by step and spot out the gaps limiting process efficiency.

Real-Time Alerts and Automation

Integrating automation into the supply chain process is a game-changer for modern companies, especially those on a rapid-growth trajectory. You can automate many repetitive processes, such as order picking and packing, and save substantial time and resources. 

Advanced supply chain risk management software like GAINS helps you automate routine supply chain activities like order fulfillment. GAINS goes a step further to detect and adjust for anomalies triggered by changes in your supply chain, such as seasonalities or product discount offers. It also automatically alerts you to ongoing or expected changes in the supply chain process. 

Identifying the Key Risks in Your Supply Chain

Categorizing supply chain risks according to their sources helps you tailor specific solutions for how to respond to disruptions more strategically. 

Once the sources of the risks have been identified, prioritizing risks can help you designate company resources according to the risk severity. You should create a risk assessment matrix that helps you score and categorize risks according to their occurrence probability and impact degree.  

Internal vs. External Risk Sources

Internal supply chain risks are challenges that stem from your company’s internal operations and are preventable with proper organization and efficient planning. Because they occur within your organization, you have the power to influence both their occurrence and subsequent mitigation.

Common internal supply chain risk sources include:

  • Poor bill of materials (BOM) planning processes
  • Poor inventory management practices
  • Loyalty to legacy supply chain management software
  • Lacking a company-specific risk identification and management process

Unlike internal risk sources, external supply chain risk sources are outside of your control. While you can’t control how, when, and where they occur, you can outsmart them by maintaining a proactive supply chain that’s flexible enough to anticipate the risk sources and pivot before the disruptions.

Typical external supply chain risks include: 

  • Geopolitical events
  • Natural disasters
  • Consumer demand fluctuations
  • Infrastructure challenges, such as port congestion and delays
  • Operational challenges, such as labor strikes
  • Changing regulatory compliance demands 
  • Vendor risks such as bankruptcy or data security lapses

Key Strategies to Build Resilience With Supply Chain Risk Intelligence

Implement the following strategies to create a resilient supply chain from the ground up:

Use Predictive Analytics and AI to Anticipate Disruptions

Mitigating disruptions is easier and more manageable when you have enough time to plan. An AI-driven software like GAINS helps you detect supply chain patterns and identify potential risks your company could face in the future. It also leverages demand-sensing capabilities that allow you to predict potential market disruptions that could prevent you from satisfying customer needs. 

Leverage Composability to Improve Without Overhauling

Supply chain risk management software like GAINS utilizes composable technology to make risk management more dynamic, resilient, and agile. Unlike monolithic platforms that require heavy system overhauls and complex integrations to support a new solution, composable solutions allow phased rollouts that systematically improve your supply chain process. 

Connect Risk Intelligence with Network Design

Referencing supply chain risk data when designing your supply chain networks allows you to embed risk intelligence into the system from the get-go. This way, your network will utilize AI to update its capacity and efficiency as you feed it fresh data, such as market trends, economic indicators, and projected customer demand. 

Turn Data Into Actionable Intelligence

Raw supply chain risk data doesn’t make your supply chain resilient. An innovative platform like GAINS utilizes advanced analytics tools to simultaneously analyze internal and external data and identify correlations and patterns. This helps you generate insightful forecasts and action plans applicable in real-world conditions.

Create a Risk-Aware Culture That Lasts

Risk management in supply chain management is a continuous process that should be part of your company culture. Integrating supply chain risk intelligence into your everyday decision-making gradually builds a resilient supply chain. When it becomes your company’s culture, you’ll enjoy long-term benefits that help take your company to the next level. 

Final Checklist – How to Move Forward with Confidence

Follow this checklist to build a resilient and intelligent supply chain network: 

  1. Assess and outline potential risks and prioritize them
  2. Get the right supply chain risk data 
  3. Leverage modern technologies, such as AI and ML, to analyze the data
  4. Derive actionable insights and use a risk management software to apply the insights
  5. Integrate risk management strategies into your company culture
  6. Measure and continually iterate risk management strategies to enhance outcomes

GAINS: Your Partner for Smarter, Composable Risk Management

GAINS is specifically designed to manage volatility and uncertainty. Our AI-driven risk management software helps companies focus on prioritizing the right decisions at the right time at the right speed and scale to optimize supply chain performance, mitigate external and internal risks, improve profits, and boost customer confidence.

Request a demo today and experience GAINS’  innovative risk management capabilities.

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