Supply chains have been accomplishing business goals for a long time now and have played a huge role in fulfilling social and societal responsibilities . These unprecedented times putting supply chains to the test everywhere re-affirm that, ‘Supply Chains Do Matter.’ This is without a doubt the case during the current pandemic where delivering well-being and healthcare to global populations is deemed a necessity.
Supply chains are no longer just simple chainsl rather interconnected complex supply networks extending across and between companies spanning the globe dependent on customer fulfillment. Firms source goods and services from suppliers around the world, who in turn source from others. A disturbance to one part of the network makes the entire ecosystem vulnerable to disruption.
These interdependencies, though making the overall system efficient over the years, have resulted in unforeseeable risks and vulnerabilities. Supply chains have been hit by unforeseen disruptions – like the Fukushima nuclear disaster in 2011 that cut the world’s supply to a major part required for cars interrupting close to 40% of the production around the world, reinforcing the fact that supply chain is a strategic consideration and these strategies need to be rethought and revamped from time to time.
Is COVID-19 the new ‘Black Swan’, coercing companies and industries all over the world to reassess their supply chain strategies? Will they be forced to address the long-time-neglected elephant in the room – ‘Lack of visibility across supply chains’?
The need for resilience – Rethink your strategy
The current scenario where the true extremities of the disruption are still unknown is raising concerns regarding a global supply chain crisis due to sourcing strategies that heavily rely on low cost regions like China or India. Diversification of supplier base becomes crucial in times like these to tackle future disruptions. Supplier disruptions beyond direct suppliers i.e., tier 2,3 suppliers and beyond can be assessed through intensive supply chain mapping. According to data, 90% of the Fortune 1000 companies have tier 2 suppliers in the regions of China. Thus, risk management principles can be applied to at least to tier 1 and 2 suppliers to prepare for unforeseen disruptions in advance.
End to end visibility, responsiveness, real-time insights and decisive actions will become necessary to make your supply chain more resilient.
Technology is your friend – Building smarter supply chains
In the post COVID-19 era – many emerging technologies that enable connecting customer demand and supply network physical and digital processes in near real-time dimensions will deliver, like:
- Digitally Enabled Response Networks that automatically monitor and provide early warning to unplanned events, or patterns to such unplanned events
- IoT coupled with technologies like GPS laden sensors
- Blockchain for permissioned sharing of information with better control over data sharing
These capabilities will enable organizations to see where their products are – real time – across the world. This enables better understanding of upstream and downstream impacts, enabling more rapid responses. It is time to move away from paper to digitization especially when it comes to paperwork. It is important to make data available through digital means to limit impacts of points of failure in the value chains. Using blockchain can ensure greater privacy for suppliers thus enabling greater participation in visibility initiatives.
For example, the hard hit grocery supply chain with the right digital strategy connecting – stores, inventory management systems, warehouses and distribution centers, suppliers’ value chain and consumers can support the changes in consumer demand, needs of store managers with additional benefits to suppliers as well. This enhanced visibility and real-time transactional data availability will enable higher efficiency in employees and increase productivity and deliver customer satisfaction.
In the post COVID-19 era, suppliers will be faced with a choice to use these challenging times as an opportunity for growth and become more resilient or hope that such a disruption would not happen again. Contact Bricz at firstname.lastname@example.org to revamp your supply chain strategy and maximize your supply chain potential!
Contributor: Aanchal Narula, Supply Chain Consultant at Bricz