Business Scenario 1:
shortage of microchips
Introduction
Microchips are essential to manufacturing countless products, including cars. But when demand for new vehicles first plummeted, and then rebounded, during the pandemic, microchip supply chains struggled to keep up.
Like many others in the industry, one global technology company saw that its lack of supply chain resiliency was putting both its profit margin and market valuation at risk.
Mitigation & Recovery
Given the magnitude of this problem, company leaders were determined to find a solution.
The team first performed a maturity assessment, examining current supply chain risk management practices and capabilities. It identified an opportunity to move from the company’s basic, reactive capabilities to more proactive risk management using advanced technologies and analytics. This would allow the company to build the muscle needed for long-term resilience across its entire value chain not just for microchip supply.
Risk Assessment
The team developed an advanced heat map to identify high risk suppliers and components and recommend mitigating actions. The heat map analysed over one thousand parts including the smallest components that could delay a final product and put the company’s revenue at risk if they suddenly became unavailable.
To perform the analysis and understand revenue impacts, the team leveraged company data and created a “supply chain digital twin”.
SC Digital Twin
The digital twin is a virtual replica of the company’s global supply chain. It’s highly detailed, providing a virtual map of every factory, warehouse, material and component supplier in the supply chain, along with visibility into interdependencies.
The digital twin allows the company to visualize, understand and analyse various supply chain challenges, such as physical flow complexity, supplier concentrations, supply bottlenecks and revenue at risk. This can happen throught supply chain resilience stress test. The stress test subjects the digital twin to pre-defined, disruptive scenarios.
Conclusion
The advanced supply chain capabilities will help the company focus on proactive supply chain management. In combination, the maturity assessment, heat map, digital twin and stress test were able to produce several targeted risk mitigation actions across business functions.
With the digital twin and its visualization and analytics tools, the company can respond in hours rather than weeks to disruption
These advanced capabilities also position the company for increased commercial success.
Bibliography
•https://www.accenture.com/bg-en/case-studies/supply-chain-operations/risk-management-supply-chain-resilience
•https://www.accenture.com/_acnmedia/PDF-176/Accenture-Risk-Management-Supply-Chain-Resilience.pdf#zoom=40