DHL has identified four ways to bolster supply chain resilience in a new report, Supply Chain Diversification.
The report defines supply chain diversification as a proactive approach where companies incorporate one or several dimensions into their supply chains to minimise risk. This includes multi-shored supply networks, multi-sourcing, parallel modes of transportation, and concurrent or redundant logistics operations.
“The events of the last few years have shown us the importance of resilient supply chains and companies adapting their global supply networks accordingly,” said Katja Busch, chief commercial officer and head of DHL customer solutions & innovation.
“At DHL we are committed to supporting our customers in staying resilient in a sustainable way by providing tailored solutions, sharing best practices, and facilitating collaborative initiatives.”
Illustrative model of the dimensions of supply chain diversification
In the model developed by DHL in collaboration with Emeritus Professor Richard Wilding OBE, an expert in logistics and supply chain Management, four dimensions of supply chain diversification are illustrated:
Dimension 1 – Multi Shoring: This involves spreading manufacturing and supplier locations across different regions or countries to mitigate risks. It includes duplicating manufacturing capabilities and using the same supplier in different locations.
Dimension 2 – Manufacturing & Supplier Network: Expanding the network to include redundant suppliers and manufacturing capacities to address financial and operational risks.
Dimension 3 – Mode of transportation: Utilising multiple transportation modes simultaneously, covering all stages of transport, including first mile, long haul, and last mile, to diversify routes and reduce risk.
Dimension 4 – Logistics Operations: Expanding logistics infrastructure to include additional functions like hubs, warehouses, and distribution centres. This may involve adding redundant capacity nearby and outsourcing certain logistics activities for diversification.
