Why Real-Time Supply Chain Monitoring Is Essential for Risk Management

Article Highlights:

• Real-time supply chain monitoring refers to the ability to see the suppliers, manufacturers, activities, and other variables that make up your supply chain through constantly evolving data and intelligence. 
• Real-time monitoring is a multifaceted functionality that gives organizations in-depth access to suppliers, markets, and developing events. Ideally, all these factors will come together to form an accurate, layered window into a business’s supply chain. 
• With the monitoring and risk intelligence provided by the Z2Data platform, organizations are able to keep an eye on over 100 risk events, including natural disasters, trade barriers, geopolitical conflicts, and cybersecurity incidents, among many others. 

When people think of supply chain risk management (SCRM), the first things that come to mind are often the key stakeholders: direct suppliers, sub-tier manufacturers, distributors. Many original equipment manufacturers (OEMs) rightly believe that much of the risk embedded in their supply chains lies with these actors, whose financial instability, regulatory noncompliance, or operational issues could derail production and jeopardize manufacturing continuity.

But today’s supply chains are highly intricate webs that can be disrupted by a wide range of variables, many of which materialize rapidly and without warning. Events like natural disasters, geopolitical conflicts, and trade restrictions have nothing to do with the competence or stability of suppliers, but can nevertheless have an outsized impact on supply chains and product continuity. It’s because of incidents like these that real-time supply chain monitoring is such a critical component of today’s SCRM. Without the ability to see into suppliers, individual factories, and local infrastructure in real time, businesses will lack the agility to respond to disruptions with timeliness and precision. All the data and intelligence in the world loses much of its usefulness if it isn’t updated in a way that reflects the dynamic, ever-evolving reality of global supply chains. 

What Is Real-Time Supply Chain Monitoring?

Real-time supply chain monitoring refers to the ability to see the suppliers, manufacturers, activities, and other variables that make up your supply chain through constantly evolving data and intelligence. Supply chain monitoring often focuses on factors like inventories, production timelines, factory operations, and sales to give businesses a multifaceted view into their market dynamics. 

But the most comprehensive supply chain monitoring tools go beyond market data, too, by tracking events, incidents, and other potential risks that could disrupt supply chains. These include everything from hurricanes and geopolitical conflicts to labor strikes and cybersecurity incidents. Any variable that could trigger a supply chain disruption falls within the purview of real-time supply chain monitoring. 

Most OEMs and other businesses don’t have the internal capabilities to conduct supply chain monitoring on their own. Instead, they rely on SCRM platforms with the technology, databases, and research expertise to surveil supplier networks and provide timely updates. SCRM tool Z2Data, for example, provides users with real-time visibility into over 120 incident types, drawing on thousands of verified sources to give businesses a dynamic picture of how disruptions are impacting their supply chains. 

The Three Most Important Aspects of Supply Chain Monitoring

Real-time monitoring is a multifaceted functionality that gives organizations in-depth access to suppliers, markets, and developing events. Ideally, all these factors will come together to form an accurate, layered window into a business’s supply chain. 

Real-Time Market Data

OEMs that operate in large, globalized industries want to be able to access comprehensive data on their suppliers and the markets they operate in. This means being able to parse prices, inventory levels, lead times, and other key variables. The suppliers, distributors, and supply and demand dynamics for these industries are constantly fluctuating, and continuous access to this data can serve as a critical operational advantage—informing short-term purchasing decisions and longer-term sourcing strategies.

Monitoring Through Verifiable Sources

In addition to allowing firms to peer into their suppliers and the markets they operate in, real-time supply chain monitoring also allows businesses to follow global events as they’re unfolding. It does this by tracking a battery of different sources with high levels of accuracy and credibility. These may include:

In addition to allowing firms to peer into their suppliers and the markets they operate in, real-time supply chain monitoring also allows businesses to follow global events as they’re unfolding.

• News agencies
• Regulatory filings
• Supplier and distributor websites
• Social media
• Government reports and other publications
• Production change notifications (PDNs) and product discontinuance notices (PCNs)

For example, a large-scale labor strike at an interconnect, passive, and electromechanical (IP&E) manufacturer based in China could have serious ramifications for OEMs in the U.S. Businesses with access to real-time supply chain monitoring will be made aware of this risk as soon as it emerges, giving them the time and bandwidth to implement mitigation strategies that minimize negative impacts and related financial losses. This could mean reaching out to the impacted manufacturer to gather decisive intelligence as soon as it’s available; bolstering inventory of crosses via other suppliers; or rebalancing multisourcing to draw more heavily on an alternative IP&E supplier. All of these contingency measures are made possible through the raft of verifiable sources that inform real-time supply chain monitoring. 

Customized Impact Assessment 

The best supply chain monitoring tools don’t rely solely on updates from news sources, supplier websites, and government agencies, though. To be truly effective, real-time monitoring needs to be tailored to the supply chains of individual organizations. In order to do this, supply chain risk management (SCRM) tools need to map events onto their customers’ direct and sub-tier supplier networks. This is a complex process that goes well beyond simply looking into how a specific disruption impacted manufacturer A, B, and C. Cutting-edge supply chain monitoring is able to correlate events to a myriad of supply chain variables:

To be truly effective, real-time monitoring needs to be tailored to the supply chains of individual organizations.

• Direct suppliers and sub-tier manufacturers.
• Manufacturing sites and other supplier facilities.
• Associated parts, BOMs, and end products.
• Critical minerals, rare earth elements (REEs), and other raw materials.
• Estimates revenue at risk.

By providing customized impact assessments in this way, real-time supply chain monitoring provides OEMs with useful intelligence that translates to mitigation measures and other decisive actions. This significantly reduces the amount of time squandered in a state of uncertainty—Did this typhoon impact my suppliers, and when will I find out?—and helps organizations maximize the time they have before manufacturing continuity and revenue is in peril.

The Key Benefits of Real-Time Supply Chain Monitoring

Supply chain monitoring is a highly practical resource that firms can leverage to their advantage in a range of different ways. Contrasting itself with the large volumes of data “noise” that many businesses have come to see as stagnant and impenetrable, real-time monitoring feeds directly into sourcing decisions and larger strategic frameworks. 

Rapidly Respond to Major Disruptions

The first and most indisputable benefit offered by supply chain monitoring is the ability to respond to disruptions in real time. Whether it’s a natural disaster halfway across the world, damage to transportation infrastructure in the U.S., or emerging trade barriers between nations, supply chain monitoring gives businesses the context and intelligence to make snap decisions. 

While some firms may feel that financial losses are inevitable in the wake of a major disruption, the most resilient manufacturers know otherwise. For them, real-time supply chain monitoring is a key element of their supply chain risk management that allows them to lean on their agility and responsiveness during periods of supply chain turbulence—while rival firms are maintaining a reactive stance, anxiously waiting for the smoke to clear. 

There are a battery of pivotal responses organizations can take that are informed by real-time supply chain monitoring:

• Stepping up communications with impacted suppliers
• Drawing on alternative sourcing 
• Rebalancing multisourcing
• Capitalizing on shortages created by large-scale disruptions
• Identifying issues in sub-tiers 
• Modifying purchasing decisions based on impending supply chain developments 

Avoid Bottlenecks 

In the world of sourcing and procurement, few things inspire more dread than supply chain bottlenecks. These points of obstruction—which may take the form of suppliers, manufacturing sites, or processes—constrict the flow of materials, parts, or goods, slowing down the manufacturing process and ultimately impacting production. Firms don’t need to treat supply chain bottlenecks as an inevitable drain on their operational efficiency, however: real-time monitoring can help businesses identify an emerging bottleneck before it throttles their production and starts eroding revenue. 

Identify Patterns That Inform Strategic Sourcing 

Effective SCRM is more than just reactive measures in the thick of a supply chain disruption. By gathering data, collecting insights, and developing a deeper understanding of the risk landscape, OEMs can foster a proactive approach to risk management. Real-time monitoring can aid these efforts by providing sourcing experts with the continuous data and information necessary to identifying supply chain patterns. Supply chain monitoring may yield insights into a particularly vulnerable supplier, an emerging supply and demand trend, or revenue risks associated with specific events. 

While supply chain monitoring is generally seen as a resource for bolstering agility and responsiveness in the midst of a crisis, it can also yield the kinds of insights that help shape larger strategies around sourcing and procurement. 

How Z2Data’s Monitoring and Risk Intelligence Strengthens SCRM

Building SCRM resilience today requires businesses to have their finger on the pulse of their supply chain, staying carefully attuned to disruptions, market shifts, and other critical changes. With the monitoring and risk intelligence provided by the Z2Data platform, organizations are able to keep an eye on over 100 risk events, including natural disasters, trade barriers, geopolitical conflicts, and cybersecurity incidents, among many others. 

Z2Data’s advanced impact analysis capability maps these incidents onto customer supply chains, assessing impact on sites, parts, products, sub-tier manufacturers, and even revenue. It all adds up to a powerful, practical tool that gives OEMs much-coveted agility in a supply chain crisis—an essential ingredient in cultivating SCRM resilience. 

To learn more about Z2Data and how its event monitoring capabilities can help companies mount strategic responses to supply chain incidents, schedule a free trial with one of our product experts.