Balancing just-in-time with just-in-case: Profitable redundancy in supply chains

Balancing just-in-time with just-in-case with just-in-case: Profitable redundancy in supply chains
Supply chain pressures
How to identify and prioritise supply chain issues
Developing digitally enhanced supply chains
Instituting a just-in-case approach

Balancing just-in-time with just-in-case: Profitable redundancy in supply chains

The unacceptable levels of risk in long and fragile supply chains are not new, nor are they products of the COVID-19 pandemic. However, the experience of the past year has confirmed the time is now to introduce more resilience into supply chains. 

That task, after years and even decades of increasing efficiencies, can appear daunting, prohibitively costly and damaging to the bottom line. However, if done strategically, enhancing this resilience can enhance both customer experience and profitability.

Digital visibility

The first part of this process is developing more digitally integrated supply chains, with a focus on improving network visibility and responsiveness. 

For this to be a reality, regional networks will need to be well integrated, with partners throughout the supply chain sharing data in real time, providing the ability to monitor and react to any emerging disruptions. 

Enhanced visibility improves the communication with customers in good times as well as during crises, enhancing customer experience and loyalty. The pandemic has proved that companies which can communicate well with their customers during a crisis retain them, even if delivery is delayed. By improving communication with customers during uncertain times, business can enable better customer experiences.

Multinational companies in Asia Pacific must take the lead on developing these digitally integrated networks, and focus on establishing a technology-driven “control tower” (or supply-chain hub) to centrally manage their regional production plants and supply networks. 

This will require a robust implementation plan, focusing on:

  • Understanding current digital readiness levels throughout the supply chain and identifying priority pain points

  • Deploying pilot programs to understand which technologies can help address these pain points and reduce exposure to emerging risks

  • Develop a detailed roll-out plan incorporating learnings from pilot programs.

Targeted profitable redundancy

While a digitally integrated supply chain can deliver benefits to all customers, for maximum resilience companies should also identify their higher-value customers and adopt a ‘just-in-case’ approach for them.

This means mitigating supply chain risks by building redundancy or back-up capacity for premium customers – those for which the cost of a potential disruption far exceeds the cost of building back-up capacity.

That capacity can come in two forms – alternative supply options and buffer stocks of inventory.

The enhanced inventory levels enable companies to serve their high-value customers in a short time during normal times and still guarantee delivery during disruptions. Such a premium service enhances customer experience and enables profitable redundancy.

Find your local Asia Pacific contact

Christopher Kelkar

PwC Asia Pacific Vice Chairman, Operations, PwC United States

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Sridharan Nair

PwC Asia Pacific Vice Chairman, Markets, PwC Malaysia

+603 2173 1188

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David Wijeratne

Partner, Growth Markets Practice, PwC Singapore

+65 9759 1784

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Nurul A'in Abdul Latif

Deputy Executive Chair, PwC Malaysia

+60 (3) 2173 0935

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Peter Chambers

Partner, Auckland, PwC New Zealand

+64 21 404 015

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Jenny Chong

Asia Pacific International Tax Services Leader, Shanghai, PwC China

+[86] (21) 2323 3219

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Roderick Danao

Vice Chairman and Assurance Partner Markets Leader, Makati, PwC Philippines

+63 (2) 459 3065

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Gary Dutton

Partner, National Trade Leader, Brisbane, PwC Australia

+61 434 182 652

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Jason Hayes

Partner, Sydney, PwC Australia

+61 407 232 142

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Thomas Leung

Markets Leader, PwC China

+[86] (10) 6533 2838 / +[852] 2289 8288

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Kevin Lin

Markets Leader, Taipei, PwC Taiwan

+886 2 27296666, x25230

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Jacky Lu

Partner, PwC Taiwan

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Nguyen Luong Hien

Partner, Deals/Strategy, Ho Chi Minh City, PwC Vietnam

+84 28 3823 0796

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Yukinori Morishita

Markets Leader, PwC Japan

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Ay-Tjhing Phan

Markets Leader, Jakarta, PwC Indonesia

+62 21 509 92901

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Marc Philipp

Consumer and Industrial Products Leader, South East Asia Consulting, PwC Singapore

+65 8223 1503

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Joanne Robinson

General Manager, Auckland, PwC New Zealand

+64275896335

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Kok Weng Sam

Markets Leader, PwC Singapore

+65 9367 3340

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Oliver Sargent

Partner, Sydney, PwC Australia

612 8266 0461

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Redha Shukor

Partner, Sustainability and Operations, PwC Malaysia

+60 (3) 2173 1832

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Niphan Srisukhumbowornchai

Markets Leader, Bangkok, PwC Thailand

+66 (0) 2844 1000 ext. 4723

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Sarah Stewart

Partner, PwC Australia

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Daimi Tanaka

Partner, PwC Japan

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David Tay

Markets Director, TP.HCM, PwC Vietnam

+84 28 3823 0796, Ext. 4691

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Paulson Tseng

Tax Reporting and Strategy leader, PwC Taiwan

+886 2 27296666 23672

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Steven Zhong

ESG Strategy Lead Partner, Shanghai, PwC China

+[86] (21) 2323 5349

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