Overcoming challenges and reducing risks

With the extensive and deeply interconnected network of teams and processes involved with the production […]

With the extensive and deeply interconnected network of teams and processes involved with the production and distribution of a company’s products or services, it’s crucial to have an analytical approach to supply chain management (SCM). Without it, companies will not be able to make informed decisions that integrate their teams and processes for maximum performance. It is through the ongoing analysis and leveraging of qualitative data that companies weave the story of how to tackle challenges, mitigate risks and align supply chain operations with the overall business strategy. That’s where a thematic approach to supply chain management comes into play.

What is a thematic analysis approach?

Thematic analysis (TA) represents a common and adaptable approach for analyzing qualitative data. The method focuses on collecting, evaluating and interpreting data to define specific themes patterns. First credited to philosopher of science Gerard Houlton in the 1970s, TA as a modern practice has been widely attributed to psychologists Virginia Braun and Victoria Clarke, whose 2006 publication offers an accessible and theoretically flexible approach to analyzing qualitative data. Braun and Clarke’s approach to TA is purposefully designed to be adaptable across many kinds of research, including supply chain management.

Thematic analysis is not limited to a single industry and the approach generally includes the following six steps:

1.Familiarization — get to know the data set via a thorough overview.

2.Coding — create a set of codes or shorthand labels to describe the patterns revealed in the data.

3.Generating themes — group recurring codes under their common meanings as identified themes.

4.Reviewing themes — compare initially generated themes back against the data to further clarify, modify and combine themes.

5.Defining and naming themes — identify the essence of what each theme means within the context of the data and other themes.

6.Analyzing themes — produce a narrative that that reports the data’s impact in a broader context.

When it comes to supply chain management, ongoing TA provides SCM teams with the evaluative framework necessary to leverage qualitative data toward better decision-making, especially when quantitative data isn’t telling the whole story. Thematic analysis empowers supply chain teams to identify patterns within qualitative data to help identify emerging risks and locate the root of disruptions. The supply chain team then takes the reins, locating the responsible parties that can take appropriate actions to mitigate risk or resolve issues. TA empowers management teams with the data they need to make informed and timely decisions. With TA as a framework, organizations can take a flexible theme-based approach to their supply chain operations.

Internal and external themes

There are clear themes already present in the breakdown of supply chain operations, and a thematic approach allows leaders to wield those themes for decision making and issue resolution. Start by identifying internal and external themes within an organization’s supply chain to determine which are within the organization’s control and which are not. From there, businesses can evaluate upstream and downstream impacts and disruptions within an established framework.

Internal supply chain themes stem from supply chain operations within a company. These themes are visible and can be well managed by leaders that recognize the important roles of processes, communications, and culture to effectively manage supply chain disruptions. Here, the foundation has to do with the alignment of the supply chain and overall business strategy. For this to happen, it is important for a company’s mission, vision, goals, priorities and key initiatives to be clearly defined. From there, supply chain teams can use a thematic approach to identify themes of disruption within the framework of supply chain operations.

External supply chain themes can appear vast and volatile, but by properly defining them, they become more tangible, and therefore manageable. Still, external disruptions are normally beyond the control of management as they originate outside of an organization. It’s vital to examine how the ripple effects of external disruptive themes can move internally to identify an action plan that will mitigate impacts. Sometimes it’s a challenge to identify external teams as they may originate upstream or downstream a supply chain. External disruptions can be addressed by identifying themes from the start and taking timely and appropriate actions to manage misalignments across established themes.

Mitigate risks with a thematic approach

A thematic approach can then be applied to analyze threats to supply chain operations. To mitigate risk, companies need to consider known and unknown factors and potential consequences at all stages of strategy and supply chain management. Risks can be further broken down into external and internal themes when analyzing data, and crafting business and SCM strategies:

External Threats

1. Demand risk — caused by unpredictable or misunderstood forecasted demand

2. Supply risk — caused by any interruptions to the flow of product

3. Environmental risk — caused by factors outside the supply chain, including economic, social, governmental, physical and ecological factors

4. Business risk — caused by supplier or business relationship factors including their stability, finances or management.

Internal Threats

1.Manufacturing risk — caused by disruptions in the internal operations behind the production of goods or services

2.Planning risk — caused by ineffective analysis, organization, or strategy, leading to ineffective management

3.Financial risk — caused by internal fiduciary decisions and challenges.

Businesses that understand and analyze these risks, whether internal or external, are better prepared to react to and manage them. By defining risks, businesses can create a risk mitigation strategy and that helps predict and avoid threats altogether. Consider which of these are relevant to the company and create risk metrics to allow management teams to measure the level and impact of high risks and provide the tools to implement change for risk mitigation. Risk metrics are probabilistic by nature, meaning management should be looking at what impact “would” look like, rather than damage already done. Past data can help mitigate future risks, but don’t allow low-impact risks to become high-impact with the common mindset of “it’s not going to happen to me.” Account for all possible risks and aim to keep risk low by thematically analyzing probable risks and their precursors.

Thematic approach in action

This histogram shows the culmination of relevant data collected and coded, and the various internal and external supply chain themes identified within the data, mapped relative to prevalence.

By considering the widespread discourse about present supply chain disruptions, supply chain teams can then cross reference the relevance of these themes in their own supply chain and decide where mitigation actions must take place. For example, if a company identifies risk exposure to the theme “chip shortage,” it’s possible to identify both that disruption’s origin, and possible paths of mitigation and their responsible parties. This involves locating and positioning the right party for problem solving. In the case of the “chip shortage” theme, for example, mitigation could belong to the purchasing team to quickly decide on the right actions, such as releasing early purchase orders or identifying alternate chips, or belong to the production team, to redesign printed circuit board assembly. These clearly identified themes enable the quickest mitigation of disruptions as possible to get supply chain operations back on course.

Build an internal foundation

It’s vital to look internally when trying to solve problems or mitigate risks, even when trying to solve external challenges. Especially in times of significant crisis and turmoil when supply chain disruptions are widespread, it can be easy for supply chain operations to point fingers at external forces. However, if businesses are constantly framing SCM challenges as external, then those companies are in for a constantly uphill battle when solving issues. Use thematic analysis to identify the internal issues and repercussions of external challenges and risks. Then, take ownership over those challenges, even when a failure or challenge feels outside of one’s control.

Sanjay Gupta has more than two decades’ experience in global logistics and developing world class supply chain solutions in a variety of industries. He holds a Master of Engineering in Supply Chain Management from Massachusetts Institute of Technology, Boston MA and can be reached at .(JavaScript must be enabled to view this email address).

 


The original article can be found at: Supply Chain Management Review