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Supply Chain Disruption And How To Respond With Technology

COVID-19 has wreaked havoc on supply chains all around the world. They’ve also been a lifeline for the response, ensuring that important medical supplies, food, and other essentials are delivered where they’re needed most.

There’s no doubt that the pandemic has put supply chain leaders’ ingenuity, resilience, and adaptability to the test as they tried to keep vital operations running.

In addition, the epidemic has proven to be a true test of business principles and purpose. Consumers, investors, governments, and communities may ultimately judge businesses based on how they respond to the disruption.

Supply Chain Repercussions

The disruption to supply networks is continuing to be severe, with the virus remaining a real threat and a number of regions and economies in lockdown, while others emerge into a completely different world.

The supply chain will be crucial in supplying goods and services promptly, safely, and securely as economies recover.

To maintain corporate operations and serve their customers, clients, and communities, as well as safeguard and support their people, business leaders must make quick judgments and take swift action.

Supply networks that have been repurposed and reformed in the future will need to be resilient as well as responsible.

These will assist communities in coping with the short-term crises, as well as businesses in building around their clients and assisting economies in recovering.

COVID-19 is causing supply chain interruptions in 94% of Fortune 1000 organizations.

75 percent of enterprises have had bad or extremely severe consequences

55 percent of businesses expect to lower their growth forecasts (or have already done so).

Supply Chain Risks

Fundamental shifts in consumer behavior, supply chains, and routes to market have thrown enterprises off balance as a result of the COVID-19 issue. As a result of the pandemic, executives must expedite the adoption of agile working practices and value chain transformation to better navigate unpredictability.

COVID-19 isn’t your average health hazard. The magnitude of its influence is unrivaled by anything most supply chain executives have seen before.

Because of the rapid rate of escalation, continuous end-to-end assessment, optimization, and monitoring is required. Companies must act quickly and boldly to develop and implement a short-term tactical plan that will reduce threats to human health and protect global supply networks. Strong data and analytics capabilities are critical in this process for comprehending complexity, anticipating potential disruption, and formulating a reaction rapidly.

Supply Chain Disruption Withing The Industry

In the face of multi-country disruptions, supply networks lack global resilience and are breaking down.

Supply chain and operations are growing more expensive (e.g., less global and ecommerce fulfillment expenses) – and can sometimes be the greatest costs for a company.

Supply chains and operations have major environmental and societal implications that do not match stakeholders’ expectations for long-term sustainability.

Talent shortages in the supply chain and operations continue to place a heavy reliance on human labor.

The inability to meet client requests for personalization and customisation is hampered by a lack of flexibility.

IT systems are still inefficient, inflexible, and overly reliant on legacy technologies.

How To Respond To Supply Chain Disruption?

Businesses must manage the financial and operational obstacles of coronavirus while meeting the demands of their employees, customers, and suppliers as quickly as possible.

Supply chain leaders can transform huge complexity and supply chain disruption into significant change by taking the proper steps.

As they respond to both the immediate impacts of the pandemic and prepare for what comes next, a continuous cycle of risk mobilizing, sensing, analysis, configuration, and operation will help to optimize results and mitigate risks.

The COVID-19 pandemic isn’t merely a passing fad. It will have long-term consequences for how people work and how supply networks operate.

Businesses must now establish long-term resilience in their value chains in order to manage future problems.

This necessitates a holistic approach to supply chain management. Companies must include enough flexibility in their plans to guard against future disruptions.

They should also think about putting together a solid framework that includes a risk management operations capability that is both responsive and resilient.

That capability should be driven by technology, with platforms that support applied analytics, AI, and Machine Learning.

It should also ensure supply chain transparency from beginning to end. Risk response will need to become an intrinsic element of business-as-usual practices in the long run.

COVID-19: Repurpose Your Supply Chain For Resilience

COVID-19’s unprecedented supply chain interruption has had serious operational and budgetary ramifications, with planners having to deal with difficulties such as:

Demand fluctuates due to segment supply shortages, inventory positioning issues, and lower productivity.

To make matters more difficult, during the pandemic, planners were unable to rely on the steady-state models that are at the basis of most existing planning systems.

Instead, they’ve played a critical role as the “nerve centre” for the flow of supply chain data, making decisions based on real-time data.

So, what’s next? There are five supply chain priorities that need to be addressed right away.
Prioritize people. Supporting innovative ways of working will keep the planning workforce healthy and productive.

Maximize visibility into demand, inventories, capacity, supply, and financing across the ecosystem by leveraging data.

Define segmentation that can carefully examine demand and identify priority micro-segments.

Build a sales and operations team by assembling dedicated personnel to plan and execute teams capable of handling many interventions and efficiently orchestrating responses.

Run simulations to anticipate when and where surpluses and shortages are likely to occur, as well as end-to-end scenarios to gain actionable insights that can improve operational metrics.

Companies may use this difficult period to figure out where they need to invest, improve their supply chain planning, and reposition themselves for growth once the economy recovers. There are three main areas of focus:

Supply chain logistics

COVID-19 is wreaking havoc on worldwide distribution. Longer wait times are a result of increased border inspections and customs restrictions, and a lack of capacity for long-haul and last-mile fulfillment creates exceptional obstacles.

As a result, businesses are speeding up their digital transformations, with logistics companies introducing features such as real-time order tracking, end-to-end inventory visibility, and super-reverse logistics experiences.

Businesses can, however, take advantage of this chance to re-engineer their operations with digital capabilities and renew their logistics operating models in order to improve operational efficiency and effectiveness.

They will emerge stronger and with supply networks that are more resilient to future crises if they do so.

COVID-19’s influence on logistics can be addressed in five ways.

  • To gain real-time visibility into operations, deploy an integrated logistics control tower.
  • To balance supply and demand, increase flexibility by repurposing assets, inventory, and capabilities.
  • Effective communication – ensuring that onsite and remote personnel, suppliers, carriers, and customers are all kept informed.
  • Support the workforce – take care of the core staff as well as the extended logistics workforce’s physical and mental wellness.
  • Think imaginatively and purposefully on how to support customers, suppliers, and logistics networks affected by COVID-19 as a responsible steward of supply chains.

Supply chain procurement

COVID-19 has wreaked havoc on global supply networks. In the face of considerable disruption to their teams, people, and local communities, procurement leaders must sustain business operations, meet urgent demands, and manage supplier problems.

Initial efforts have centered on adjusting short-term sourcing decisions in light of supply network restrictions, as well as controlling upstream supply disruptions from tier 1 and tier 2 suppliers.

They must now focus on the medium-term security of the supply base, wisely unlocking finances and constructing future-proof resilience.

This approach will not only aid in the immediate management of COVID-19, but will also help to build stronger and more resilient enterprises that will thrive when economies recover.

There are five areas that require quick attention.

  • Develop a new digitally-driven procurement operating model and new ways of engaging with internal customers, the supplier ecosystem, and external partners by putting people first.
  • Manage and mitigate supply uncertainty with suppliers of all sizes – small, medium, and large – to secure the supply base.
  • Increase your reliance on responsible actions to reduce needless spending and free up cash for future growth projects.
  • Update risk management techniques to enable robust, purpose-driven procurement decisions in the future.

As economies recover, innovate with a purpose – employ a purpose-driven strategy to increase trust, transparency, customer centricity, and innovation.

Kilowott leverages its expertise and leadership in design, digital technologies and business process automation for a complete end-to-end business experience transformation (BxT) within the supply chain, logistics and transport industry.

We prioritize purpose, innovation, and deliver a holistic business experience to drive accelerated growth in customers, giving them exactly what they desire without trading sustainability and profitability?

Need a disruptive change to the human experience for your business or organization? Let’s talk

Jonas Bocarro
Jonas Bocarro

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