The COVID-19 pandemic has taught businesses valuable lessons, including recognising the importance of less well-paid employees, embracing flexibility, and acknowledging the potential for successful remote work. While these insights may not have been apparent before 2020, they are now widely accepted. Forward-thinking companies have already begun to prepare for potential challenges and facilitate remote work to support their key employees.
For a long time, businesses have been aware that disruptions to supply chains, which they depend on for sourcing raw materials and finished products, can occur unexpectedly. Nevertheless, the COVID-19 pandemic underlined this reality as companies globally faced considerable delays or even complete stoppages in the delivery of many goods. Consequently, businesses had to find new suppliers or forgo the products they had ordered but not received, which could result in a significant revenue decrease.
As the pandemic begins to recede, businesses are evaluating their supply chains to discover ways to minimize the impact of potential future disruptions. Companies are taking several measures to address this crucial aspect of their operations, including data analysis, employing innovative technologies, and identifying alternative suppliers. Let me elaborate on this process further.
Unbeatable Supply Chain Conditions
In an optimal supply chain, labourers should have convenient and prompt access to materials to satisfy customer orders efficiently. Failure to meet the requirements of their clients could lead to losing them to rivals who can fulfill their demands.
The most effective approach would enable businesses to switch to alternative providers whenever their current supplier is unable to satisfy their requirements. Enterprises that follow a ‘just-in-time’ model prioritize having a dependable and adaptable supply chain to minimize storage costs and reduce the possibility of unsold inventory. The lack of alternative resources or stockpiles can cause significant harm in the event of a supply chain disruption.
Technology is a crucial element of a thriving supply chain since it allows managers to monitor the status of their shipments and recognize and resolve any problems swiftly. Leveraging advanced analytics, this data can be gathered much faster than through manual analysis, often enabling operators to anticipate faults before they occur and provide a more detailed overview.
Issues in Manufacturing
Amid the pandemic, enterprises face obstacles when acquiring crucial supplies, including personal protective equipment (PPE), toilet paper, food, and even parts for renewable energy and automotive machinery, causing disruption to both businesses and their patrons.
The COVID-19 pandemic has had the most significant impact on global supply chain operations, with revenue being the second most affected area of business. Consequently, firms in 2023 and beyond are much more cognizant of the risks associated with supply chains than in prior years. To learn more about this, visit our blog post on global supply chain operations.
Supply chain challenges are not limited to labour shortages during pandemics or social distancing. The frequency and severity of natural disasters have increased, causing supply chain disruptions that may last for several weeks. Additionally, cyber attacks are becoming a more prevalent cause of supply chain disruption. To learn more about industries experiencing disruptions, visit our blog post about blockchain disruptions in various industries.
Approaches for Transformation
In response to the supply chain interruptions caused by the pandemic, several businesses are reviewing their investment priorities. According to the global management consulting firm, Bain & Company, there has been a shift away from emphasizing customer demand to factors like flexibility, resilience, and uninterrupted operations. One method to diminish supply chain hazards is to broaden production sites.
The aim is to set up a supply network that can rapidly recuperate from setbacks. Here are specific measures that businesses can take to adapt:
- To improve the efficiency of the supply chain, a comprehensive evaluation of the existing supply chain is advised in order to identify its advantages and disadvantages. Strategies to reinforce strengths and address any shortcomings should be explored.
- Prior to selecting the least expensive supplier that is frequently situated in China, it is recommended to evaluate the potential consequences. While this may result in short-term cost reduction, any future supply chain disruption may have an adverse impact on finances.
- Production might benefit from relocating to an area that is nearer to your suppliers.
- The use of modern technologies, including data gathering and monitoring applications, analytics, and digital twins, can aid in real-time monitoring of the supply chain’s current state, allowing for disruptions to be predicted ahead of time.
- In order for workers to alter supply chain processes to changing situations, new tools like a no-code platform should be examined.
- TechCrunch suggests that businesses should adopt an organized and all-inclusive approach to supply chain management, incorporating distribution facilities and transportation hubs. It is essential to map out this process to identify possible threats from suppliers and methods for mitigating them. To learn more about requests for proposals and risk reduction methods, visit our blog post on the topic.
- Locate and evaluate potential new suppliers. It’s crucial to investigate their crisis management strategies.
- Establishing a documented plan for managing supply chain interruptions is recommended, and it should be checked frequently. Moreover, at least one, and ideally two, backup plans should be prepared beforehand.
Data standardization is a critical aspect of streamlining your supply chain. To understand why, view this video:
When deciding whether to invest in expensive modifications to address supply chain concerns, businesses should assess the expense of meeting customer expectations for competitive pricing versus maintaining a high level of resilience. As customer happiness is critical, it could be prudent to increase prices and make any required investment to guarantee a positive experience.
Now is an Excellent Moment to Evaluate Your Supply Chain
Completely reassessing a supply chain is not a straightforward task. However, with the initial disruption caused by the pandemic now subsiding, it is the perfect time to start preparing for any unforeseen circumstance, whether it’s adverse weather, a cyber-attack, or another outbreak. It may necessitate a considerable amount of time.
No business owner wants any harm to come to their company, but it has become apparent that it could occur in the future. Experts use the term ‘anti-fragile’ to describe the type of supply chain strategies companies should aim to develop; ones that are as resistant as possible to unforeseen interruptions. However, it’s crucial to keep in mind that no supply network is entirely immune to such disturbances.
