‘Supply Chain Diversification’, DHL’s latest Trend Report analyzes current dynamics and patterns in supply chain resilience and offers a new model to strengthen supply chain resilience.
Supply chain diversification is defined in the report as a proactive approach where companies incorporate one or several dimensions into their supply chains to minimize risk. This includes multi-shored supply networks, multi-sourcing, parallel modes of transportation, and concurrent or redundant logistics operations.
In the new model presented in the report, developed by DHL in collaboration with Emeritus Professor Richard Wilding OBE, one of the world’s leading experts in Logistics and Supply Chain Management, four dimensions of supply chain diversification are illustrated:
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.
Manufacturing & Supplier Network (Multi-Sourcing): expanding the network to include redundant suppliers and manufacturing capacities to address financial and operational risks.
Modes of Transportation: utilizing multiple transportation modes simultaneously, covering all stages of transport, including first mile, long haul, and last mile, to diversify routes and reduce risk.
Logistics Operations: expanding logistics infrastructure to include additional functions like hubs, warehouses, and distribution centers. This may involve adding redundant capacity nearby and outsourcing certain logistics activities for diversification.
