04 May, 2021
Understanding Supply Chain Resilience and what Covid-19 taught us about it
With the Covid-19 hitting the world so drastically, it has become important for the supply chain to become resilient and be prepared for what the future holds. With the economy worldwide going through a rollercoaster, the impact of the Covid-19 can be seen for a long time.
Confronted by such a pandemic, the companies all over the world have shifted their focus from reducing the supply chain cost to making it more resilient. Many have even started to make their business models resilient by changing their policies and business strategies in order to cope up with the disrupted global supply chain movement.
Covid-19, as of now, seems to be here to stay for worse, affecting the masses with its harmful nature, increasing in frequency and magnitude whilst deteriorating geopolitical events, public health and climate. According to the research conducted by Capgemini Research Institute, “Fast forward: Rethinking supply chain resilience for a post – Covid-19 world”, more than 80 percent of the organizations have been negatively affected by the pandemic.
What is Supply Chain resilience?
Supply Chain resilience, basically, refers to an organization’s ability to recover readily from the effects of a disruption. This also encompasses ability to bounce back from it, come up with new policies and develop ways to reduce the risks. Supply chain resilience is the capacity to be well prepared for the unexpected risky situations and adapting to better strategies to help the company get back to its normal self and/or flourish again.
Building a resilient Supply Chain
Making a supply chain resilient includes the process of reviewing your business model, making possible and needed changes in your policies and creating appropriate strategies to run your organization even during the time of the disruption. These include –
1. Supply Chain Transparency
The process of tracking and knowing the whereabouts of the shipment, parts, cargo or products in transit from manufacturer to their final destination is what supply chain visibility comprises of. The supply chain visibility is guided supply chain management technology which provides almost real-time data about logistics. The provided data helps these companies to overcome any shortages or disruptions hampering their productivity.
2. Digital Transformation
Along with making the shipping easy, the digital technology has helped the organizations make on-time deliveries, thus raising the company’s goodwill and customer’s trust. The introduction of the AI technology has made the reduced human labour costs with few complex problems across the supply chain world possible. Along with making the shipping easy, the technology has helped the organizations make on-time deliveries, thus raising the company’s goodwill and customer’s trust. The introduction of the technology has made the reduced human labour costs with few complex problems across the supply chain world possible.
3. Supplier location
It has become important to know that the long, complex supplier locations may face more disruption than the ones which are short and simple. This situation arises more in the countries where there is low-cost infrastructure. Knowing the location of your supplier and coming up with appropriate strategies can help in making the loading and deliveries better.
4. Dual sourcing policy
To avoid any last-minute cancellations, the organization can and must opt for a dual sourcing policy which will make their business go and grow no matter even if a stoppage comes. While it is expensive, one can always have a back-up plan when one of the sources is forced to suspend/stop production.
Before the pandemic hit the world, not many organizations were fully aware about their companies’ vulnerability to global crisis. Due to the post-covid situations, a lot of organizations are taking up their time to strategize the policies, improvise visibility and support company’s ability to resist such shocks. The traditional geological movement of the logistics are now transforming into a digital one where everything is one touch away, making the companies less vulnerable to the physical disruptions. The future of supply chain resilient is bright even more now that the world economy has been hit hard by the global conditions. Therefore, the supply chain companies must seize this opportunity to make their business model even more resilient to declare a triumph over Covid-19 or any other possible pandemic that may happen.
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