Early warning system: key to your supply chain

The supply chain has always been a source of challenges for any company. From raw material shortages to global logistical problems, any disruption can lead to delays, additional costs and loss of competitiveness.

In recent years, we have witnessed crises that have tested the resilience of companies in all sectors:

• The war in Ukraine and its impact on the agri-food sector.
• The blockade of the Suez Canal, by accident or threats from armed groups.
• The COVID-19 pandemic, which paralysed global production and led to shortages of key components such as chips.
• Mergers and acquisitions (M&A) that alter market conditions and affect critical suppliers.

Each of these disruptions has been a major test for supply chain management.  

But, in addition to these global events, what is imperative for any company is the monitoring of its own specific suppliers.  

Photo by CHUTTERSNAP in Unsplash

Imagine receiving real-time alerts about risks that could affect your key suppliers:

• Labour disputes that could bring production to a standstill. 
• Fires or natural disasters at strategic plants.
• Regulatory changes that complicate import/export.
• Financial problems that threaten the stability of a critical supplier. 

This type of information allows you to react in advance, find alternatives and mitigate the impact of any disruption. And this is precisely what an early warning system based on competitive intelligence offers.

And the key question is: can your company anticipate these problems instead of reacting late? 

The solution: an early warning system for the supply chain

Supply chains today are more complex and fragile than ever before. Companies have taken measures such as: 

✅ Inventory reserves to avoid stock-outs. 
✅ Dual sourcing to avoid dependence on a single supplier. 
✅ Relocation of production (reshoring, nearshoring, friendshoring) to reduce geopolitical risks. 

But these strategies have costs, are sometimes not always feasible and, above all, should not be undertaken without prior information. An early warning system is a more efficient and less costly solution. According to McKinsey (2024), supply chain disruptions can reduce annual profitability by 45%. A monitoring tool can recover 2-3% of annual performance.

How to implement an early warning system in your company

There is no need to make a large investment or develop a system from scratch. With competitive intelligence software like Antara, you can build an effective system in just a few steps:

1. Define intelligence objectives

Most companies do not have formalised intelligence interests. It is key to include supply chain intelligence in the Intelligence Directive, a strategic document that defines what information the company needs to make timely decisions. We will discuss this document in another post.

2. Setting up a intelligence system

Intelligence software allows you to model specific needs and generate automatic alerts. You can set up notifications based on key events, information sources and criticality levels.

3. Involve key teams

Procurement and Risk should be part of the intelligence flow. They can provide critical information and act quickly on alerts.

Use cases: How an early warning system can make a difference

🔹 Automotive industry: An automotive parts manufacturer detects early on that its chip supplier is having trouble fulfilling its orders. Instead of waiting for the crisis, it looks for alternatives and avoids production delays.

🔹 Agri-food sector: A food company receives an alert about an outbreak of swine fever in a country that is key to its supply. As a result, it adjusts its purchasing strategy and avoids shortages of raw materials.

🔹 Chemical manufacturing: A critical supplier goes on strike, with workers gathering at the company's door. The company concerned, which had a real-time monitoring system, investigates and discovers that the supplier is in a critical business situation: it activates an internal alert and its plan B with other suppliers.

Anticipate

Supply chain management can no longer solely be about reacting to problems. Anticipation is the key, and an early warning system can make the difference between a crisis and a competitive advantage.

In a world of increasing disruption, investing in market monitoring is not a luxury, but a strategic necessity.

If you want to know how to implement an early warning system in your company, Antara can help you. Contact us and find out how to improve the resilience of your supply chain.