Opinions expressed by Entrepreneur contributors are their own.
Covid-19 related supply chain disruptions have affected most industries. Vast numbers of companies across the globe experienced troubles during Covid-19, impacting shipment timing, costs, efficiency and revenues. These impacts highlight the importance of building a supply chain that can weather a storm and be capable of quick recovery.
Technology is critical to this. There’s a range of great tech that can aid supply chain resilience. Let’s explore the global supply chain in today’s world and how you can build strength and resilience into yours.
Supply chain challenges in a post-pandemic world
Managing supply chains can be tricky, given that a minor problem in one link on the chain can affect the whole network. Unfortunately (or fortunately), Covid-19 has exposed plenty of vulnerability in supply chains as companies buckled under the pressure of supply, demand and the ability-to-service shocks.
While restrictions are easing and borders are reopening across the globe, several challenges remain, including labor shortages and equipment availability. However, in the midst of all this, consumer demands continue to evolve. With the acceleration of ecommercecustomers are used to (and expect) fast delivery and seamless experiences.
Companies have been transforming their processes to build more resilient supply chains and maintain competitiveness. Many companies are regionalising their supply chains to respond to disruptions. Others have started exploring supply chain technologies to maximise operational efficiency and minimise risks.
Digital transformation to build a resilient supply chain
As businesses adapt to the new normal, they must future-proof their supply chains by reducing complexity and uncertainties. Increased digitisation and advanced technologies will play a critical role in managing supply chains moving forward. Through digital transformation, companies can achieve several benefits, including:
- Increased visibility: With the help of blockchain, advanced track-and-trace solutions and enterprise resource planning (ERP), you achieve better visibility within a supply chain. With high visibility, you get a complete view of your inventory in motion and can apply proactive risk mitigation measures where needed.
- Improved collaboration: Building close supplier relationships ultimately enhances transparency along the chain. By continuously collaborating with participants in the supply chain, you can quickly coordinate processes and respond to change. This requires technology to collect and share data at every step.
- Predictive capabilities: Data analytics, artificial intelligence (AI) and machine learning (ML) will provide you with predictive capabilities to stay on top of supply chain risk management. For example, you can adjust inventory decisions by predicting potential disruptions.
So, how can you achieve supply chain resilience — or where should you begin? If you have not yet changed your processes, now is the time to re-assess your operations. Here are some key strategies to help you make your supply chain more resilient.
Identify your vulnerabilities
First, assess your current supply chain to identify gaps and vulnerabilities. Examples of potential vulnerabilities are:
- Lack of transparency and visibility along the supply chain
- Overly manual processes, without technology
- Reliance on specific suppliers or locations
Don’t forget to evaluate your suppliers too — they will carry risks you need to be aware of.
Diversify your sourcing or manufacturing network
If you are heavily dependent on medium or high-risk partners, diversify your network to reduce this risk. For example, the repercussions of the US-China trade war has pushed some companies to spread their manufacturing to Southeast Asian countries such Vietnam or Indonesia.
Of course, it will take time and money to diversify your network and change your logistics strategies. However, by being less reliant on a single location, you can make your supply chain more resilient.
Create inventory buffers
Another popular strategy to promote supply chain resilience is creating inventory buffers. Covid-19 has impacted shipping timing. Inventory buffers help tackle this, and avoid customers leaving you due to out of stock products.
Technology can help with prediction of investment requirements.
Scale technology solutions
Investing in digital technologies is crucial to monitoring and optimizing supply chain resilience. Here are some ways you can incorporate technology into your supply chain:
- Chatbots and robotic process automation (RPA) to automate repetitive tasks
- Cloud enterprise resource planning (ERP) for enhanced visibility and efficient data collection
- Dashboards to get access to real-time data and track essential metrics
- Predictive analytics to identify risks and take proactive measures to address them
- Data analysis to aid with predicting issues before they occur, such as identifying stock issues or individual supplier problems
- Big data to help with:
- Quality control
- Real time deployment
- Weather patterns
- Prediction and planning
- Warehouse efficiency
- Inventory supply and demand
- IoT and wearables in warehouses to aid with picking decisioning
Successful supply chain management will continue to include emerging technologies that drive efficiency and automation. Here’s what I expect to see in the future of supply chain management:
- Distributed inventory: Distributed inventory flow forecasting (DIFF) predicts the flow of materials, helping businesses maximise order fill rate and maintain inventory levels.
- Autonomous mobile robots (AMR): While warehouse management systems continue to manage tasks such as scheduling loading/unloading, AMRs might start emerging as a method of improving picking processes.
- Driverless vehicles and drone delivery: Especially important in times of labor shortages, driverless and drone delivery options are powerful solutions. This is also great for cost management across when delivering into remote and hard-to-reach locations.
- Blockchain: Moving across borders can create transparency issues. Invoicing, planning, shipment authorisation, contracts, volume management and more could be transformed with the use of blockchain.
- 3D printing: Replicate and produce replacement parts, eliminating the need to hold stock in warehouses waiting for orders. An agreement with a local 3D printing business could print and deliver the part fast.
In today’s changing world, building supply chain resilience is more important than ever. Having the ability to stand up to disruptions, continue business as usual activities and continue growing will be underpinned by wise technology selection and implementation decisions.