illuminate

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Boosting resilience: working with like-minded partners to orchestrate critical supply chains

Supply chain disruptions from the COVID-19 pandemic and other sources have caused many governments and private sector companies to reconsider supply chain practices. It’s time to reorchestrate critical supply chains—and militaries are in an ideal place to lead the change.

Supply chains today are complex, interwoven ecosystems of suppliers, manufacturers, distributors, and consumers. Rather than small, neatly organized linear supply chains that are relatively easy to trace and understand, supply chains today are a mosaic of interdependent actors that requires complex and laborious analysis to figure out. The inability to illuminate supply chains can leave vulnerabilities hidden in the complexity. So, when a disruption, like a global pandemic, occurs, it can disturb the entire supply chain. Add in the rising strategic competition between leading trade partners and the need to rethink supply chains to reduce risk becomes increasingly clear.

To reconstruct supply chains in a more resilient manner requires not just focusing on cost and efficiency, but also balancing those concerns against risk. Rather than simply trying to reduce risk through national self-sufficiency, the solution lies in understanding which trading partners can work together to reduce supply chain risk without adding unacceptable financial cost. In this way, solving today’s supply chain problems may be less about reshoring than it is about orchestrating supply chains with close partners and allies, or ‘friendshoring’.

Reorchestrating supply chains to enhance their resilience can mean managing a dizzying number of relationships between producers, manufactures, distributors, and consumers. This can make reorchestration a challenging task for untested practices. Defense supply chains offer a great starting point. The nature of defense supply chains provides defense organizations a unique ability to explore supply chain reorchestration without causing unintended disruption. This is because for many defense products, like nuclear-powered submarines, defense organizations are the only customer. Most defense organizations already possess existing logistical programs, supply chain coordination, and shared interests needed for trusted trader relationships. Organizations should consider starting small, focusing on trust, and building commonality among curated trading partners that share the same strategic interests.

This paper explores the vital importance of supply chain illumination, risk assessment to identify vulnerabilities and resource choke points for critical products and services, and the need for supply chain reorchestration or ‘friendshoring’ through the right trade vehicle—with military organizations ideally positioned to lead the change.

Get in touch

Beth McGrath
Global Leader, Government & Public Services
bmcgrath@deloitte.com
 

Jesse Sherwood
Partner, Consulting
Deloitte Australia
jsherwood@deloitte.com.au
 

Simon Hannan
Partner, Consulting
Deloitte Australia
sihannan@deloitte.com.au
 

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