The global supply chain has enabled many corporations to reap more revenue from sales overseas; however, the global economy’s volatility threatens the sustainability of the business. Political and social upheavals and the current pandemic of COVID-19 is highlighting the weaknesses and fragilities of the supply chain. The world’s supply chain has experienced uncertainty and instability due to these factors in recent years. It is clear from the global preceding that there is unlikely to be a stable state in the future, meaning that unexpected events can strike anytime. Corporations should, therefore, prepare to handle these sudden events using the tools they have at hand. Lets know the suggestions for building a safer, more integrated supply chain.
An integrated supply chain can help mitigate the risk resulting from an unexpected change in the world scene. The integration happens when multiple corporations collaborate to coordinate their operations from productions, logistics and product distribution. The company should first integrate internally, that is, within the organization and then with other partner companies. This business method is gaining attention within the discipline of supply chain management because it enhances performance.
Levels of complexity
Supply chains usually have many business partners across the chain who work together indirectly or directly. In the process, these companies share information, financial strategies and materials. The more players within the chain, the more complex the supply chain is since it faces several endogenous and exogenous factors. These factors that contribute to the complexity of the process can arise from the network, product range, operations, supplier, customer and information complexities. Players within the chain must align these factors in the right way if they take a profitable course. Despite increased complexity, the integration idea is gaining ground among the parties for its benefits, such as enhancing open communication and driving knowledge. This paper highlights three strategies enterprises can create for a resilient supply chain to curb risks associated with the world’s business uncertainties
Build a robust and agile regional supply chain.
As discussed above, the world supply market is unpredictable and plagued with uncertainty, thus necessitating businesses to be resilient and agile. Several companies are moving away from solely focusing on cost-saving and are considering factors such as adaptability, sustainability, speed, and risk reduction. Organizations are becoming more robust by adopting more versatile product sourcing and distribution strategies that include contracting local suppliers closer to home. The pandemic caused massive disruption in the world’s market, forcing some countries to rely on local supply chains, primarily to distribute essential goods. The beauty of regionalization is that companies create visibility across the supply chain and improve the rate they adapt to drastic changes within the market. Companies can also enhance the velocity and suppleness of the movement of products from one area to the other, hence delivering to the consumer’s expectation. Building a regional supply chain is attracting many organizations today as the supply chain evolves in structure to meet consumers’ needs. Regionalization could be a starting point to build a safer and less risky supply chain since it allows corporations to effectively utilize existing networks by dividing the sector into more minor sites.
Innovation and scale faster.
Amid global crises such as COVID -19, organizations need to manufacture new products and introduce them to the market as quickly as possible. We witnessed companies flexing and innovating within record time with companies in the auto industry shift to building ventilators to meet the demand during the pandemic. Pharmaceutical companies are also shifting to research in a bid to discover the COVID-19 vaccine. Retailers are moving from the traditional way of selling products to engaging customers virtual and recording considerable sales volumes online.
Innovation teams should work around the clock to integrate the product lifecycle by accelerating the process from the product idea to commercialization. Product development and supply chain planning are no longer separate processes but a unit that ends with the client’s hands. For companies to arrive at the market faster and take advantage of the prevailing opportunity, product design should be handled within its department in the chain rather than traditionally throw it to the supply chain planner. Adopting cloud systems can also help organizations innovate faster since this method provides constant access to new information and technological designs. The swift innovation will be advantageous to firms that can resort to remote working, reroute merchandise shipment to mitigate risks of the volatile markets
Gain complete visibility and trust
Management of various organizations within the supply chain should be quick at taking decisive actions to benefit from the opportunities present in the market. Quick access to all the available information will enable managers to make insightful decisions in the complex business environment they find themselves in. An integrated supply chain proves helpful in this regard since it provides a unified data pool across the industry from which management can draw the needed information. The knowledge acquired from the data gives planners multi-tiered visibility, an essential element in deciding where to obtain material, manufacture the products, and sell the goods. Additionally, businesses can have a multiple model outcome that enables them to run their what-if probabilities to choose the safer and most profitable product. Global and regional operating visibility will enhance trust between playing partners within the chain because of information sharing that reduces friction. The visibility technology can be included in every aspect of the supply chain to improve trust and the speed at which organizations transact business with its partner and consumers.
Business across the globe is exponentially changing, and its dynamics are becoming complex. The supply chain benefits many corporations, but it is experiencing setbacks due to abrupt changes in the world’s political, social and economic space. The challenges have led significant players to rethink their strategies and how they carry on business. Companies must learn to adapt quickly through innovation, regionalization and information sharing to shield the business from the heat of unexpected change.