Supply Chain Management Challenges in Remote Locations
When operations are expanded to remote locations, supply chains bear the brunt of this shift. Also, the pressure to maintain constant production increases as operational costs increase. As Covid-19 demonstrated, when operations are remote, the supply chain is thrown into sharper relief. As a result, a new set of challenges materialize that threaten to endanger on- and offshore operations, and risk optimum supply chain performance, if not resolved quickly.
Staffing Challenges
Remote staffing can present major challenges for companies, with availability of skilled staff, adequate training, and high turnover rates among the most problematic. Companies struggle to find the right combination of skills, with the added complications of remote locations and competing companies. Covid-19 only exacerbated these issues, with nearly half of all companies experiencing workforce disruptions. A siloed approach to supply chain management can lead to complications, such as the lack of local workers, forcing companies to contract staff to travel long distances. These staffing challenges can impact multiple areas of the supply chain, making it difficult to maintain operations.
Logistical Challenges
Remote locations pose logistical challenges for industries dealing with heavy machinery and materials, requiring new routes and storage facilities. Transportation costs have risen by 22%, leading to larger inventories in transit and increased carrying costs. Sparse suppliers can result in inefficient purchasing, poorer quality materials, and unqualified contractors compromising safety. These challenges result in higher operational costs, with total logistics costs in the US reaching $1.85 trillion.
Safety Challenges
Remote locations pose new dangers to workers. To mitigate safety issues, communication with suppliers and supply chain management are essential.
Eliminating Challenges through Best Practices
Creating a culture that prioritizes the right inventory, people, and services at the right time can mitigate supply chain management challenges in remote locations and drastically improve supply chain performance. Organizations can follow best practices to implement such a culture.
A robust operating strategy can be implemented with the help of a Value Driver Tree, which can dissect the entire supply chain to show how it affects the overall business performance. This clarity can help teams recognize, and then act on, the areas that urgently need improvement. Such a value-driven strategy can help develop impactful KPIs that deal with critical drivers of performance relevant to the teamʼs setup and, of course, provide feasible targets.
This kind of strategy also helps in defining clear roles among employees on, and even across, remote worksites. Such evaluation can render every single team memberʼs accountability clear and well-defined with very little ambiguity. With every team member responsible for a specific KPI, this strategy can also provide them with a kind of motivation that isnʼt just financial but extends to recognizing their actual performance and rewarding them for it.
Qualifying all suppliers and their employees involved in a project guarantees that every one of them fulfills regulatory and compliance requirements.
While the qualification process can be complicated, especially when third-party suppliers are involved, deploying a robust supplier management system can make this crucial task effortless, effective, and comprehensive.
Clearly defined operational procedures and regular meetings go a long way toward ensuring a high level of discipline in the operational setup. However, comprehensive training and orientation programs can reinforce project requirements and usher in a higher level of workforce engagement. The use of technology can bring in a greater level of trust between suppliers and companies. This can begin from the use of GPS in transport and extend to all-inclusive analytics and cloud-based solutions that can connect all relevant systems for end-to-end monitoring and visibility.
Increase Supply Chain Visibility
In a time where remote operations have become the norm, organizations need a unified platform to manage supply chain risk and ensure continued growth. This is where Avetta One can help.
As the world’s largest Supply Chain Risk Management platform, Avetta One goes beyond top-spend suppliers to identify, assess, and eliminate risk across all areas in the supply chain including safety, liability, sustainability, cybersecurity, diversity, finances, and more.
The multilingual solution suite ensures your organization is ideally placed to manage risk, guarantee safe working environments, and meet procurement, compliance, health, and safety standards across global environments. In addition, Avetta One offers time and cost benefits to organizations and their suppliers, to execute operations and demonstrate business qualifications respectively.
For major commodity-based industries, the shift to remote locations was inevitable. And in the wake of COVID-19, the need to enhance visibility and transparency of the thousands of operational processes is equally indispensable. Going forward as supply chains become more complex and distributed, a technology-centric approach along with a robust operating strategy involving effective contractor/supplier management can be a real game changer. For progressive organizations ready to tackle next-generation supply chain challenges, the time to act is now.
