The global network of design teams, contract manufacturers, and third-party logistics suppliers collaborates to keep items flowing, expenses low, and sales rising across complex sales and distribution channels.
We’ve seen how, despite its effectiveness, this process is subject to large interruptions. How might businesses respond to build greater resilience?
Strength and vulnerability
Let’s begin by describing a typical supply chain scenario: metals mined in the Congo or West Virginia are delivered to Asia for processing, where they are transformed into high-end components used in products such as flat-screen televisions.
The finished product is then sent for a few dollars to the Port of Long Beach in Los Angeles. This is a simplified example, and details may vary, but it provides a good overview.
The costs of this scenario’s global crisscrossing are kept low in part by increasingly massive cargo ships.
Consider the Empire State Building turned upside down. The largest – and cheapest – container ships nowadays are so huge that they cannot pass through the Panama Canal.
As a result, we began to notice bottlenecks at Long Beach in the United States as demand increased in the run-up to the holiday season. These obstacles continue to exist today.
Digitalization for resilience
It’s crucial to realize that COVID-19 is just one of many potential drivers of business disruption today. Climate change, political upheavals, trade disputes, and other factors are among them. All of this necessitates supply chains that are both durable and efficient.
Digitalization is one of the keys to a resilient supply chain. You can also handle disruptions better, faster, with less complexity, and at a lower cost with a more digitized supply chain. But how does a digitalized, resilient supply chain look? Consider the following crucial elements:
To sense, predict, and respond to market developments with agility.
To adapt rapidly and profitably, you must first be able to detect market and supply chain disruptions in advance. It’s all about having real-time visibility into events and anticipating interruptions before they occur.
It’s also about synchronized planning processes, in which continuous planning is done across design, production, logistics, and operations to better predict and minimize disruption before it has an influence on operations.
Productivity should not be sacrificed in a resilient supply chain. You may automate manufacturing operations and enhance throughput while lowering production costs by digitizing industrial processes along the lines of Industry 4.0.
You can provide high-quality items faster in response to (and even ahead of) client demand thanks to data visibility and advanced analytics. Monitoring and predicting the health of equipment can also help you avoid costly machine breakdowns and production losses.
Connectivity can ensure collaboration and visibility throughout the supply chain from beginning to end.
You’ll be far better able to foresee problems and take the necessary adjustments to maintain supplying your clients if you digitally connect all of your trading partners.
The goal is to turn disjointed supply chains into flexible, collaborative networks for supply, logistics, asset management, and service – all linked by dynamic workflows and real-time data to boost productivity.
Sustainable businesses are resilient enterprises, and without a sustainable supply chain, no business can claim to be sustainable. Responsible design, ethical sourcing, sustainable production, and safe maintenance and services are all essential for success.
You may more effectively minimize waste, cut emissions, and lower your carbon footprint if you have extensive visibility into supply chain data and the capacity to analyze and verify partner practices.
You can also comply more successfully and fulfill the expectations of consumers, stakeholders, and regulatory agencies everywhere if you include sustainable procedures into your daily operations.
In conclusion
The Covid-19 outbreak has exacerbated a variety of structural vulnerabilities in global supply networks that have been growing for decades over the previous two years. With disruptions becoming the new normal, businesses in the United States are rethinking their supply chain strategy to enhance resilience and agility.
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