‘Adapting an agile and resilient supply chain management in this changing world is a must!’

At each global conference and world economic forum, there is just one pressing concern—the resilience of the economy in times of political and financial turmoil. With the world still struggling to bounce back post COVID-19, economic stability looks a distant reality unless risk mitigation is a part of annual business planning.

In the recently concluded World Economic Forum, a significant majority of chief economists feel, the weak economic outlook and geopolitical tensions are likely to have a lasting impact on progress towards development goals in the coming years. —Source World Economic Forum

However, at the same forum signs of optimism were also observed with fading supply-chain pressures. To pull out the economy from the anaemic outlook, a pre-emptive strike is needed with adaptive resilience planning.

Need for Crisis Management

Crisis management is being prepared for unknown crises or disruptions caused due to natural calamities, wars, pandemics, political unrest, or internal issues. It needs to be addressed as a crisis immediately disrupts the supply chain which is the backbone of any business irrespective of its size.

Supply chain disruptions can distraught the smooth functioning of businesses by adversely impacting the operations and reputation of a company, which eventually leads to loss of revenue. For this reason, companies must have their contingency plan ready to instantly adapt to any change in the market scenario and minimize any negative effect on the stakeholders.

Importance of Supply Chain Resilience

In today’s unpredictable environment, supply chain stability is an assurance for bouncing back to business no matter what the situation prevails. Some of the reasons for adopting resilient supply chains are—

• Risk Management: By being prepared for crises or disruptions in operations, companies can minimize risks by adopting alternative measures and reducing any financial losses while continuing to gain customer trust and loyalty.
• Business Stability: With supply chain planning, businesses secure the fate of their company even during uncertainties. Contingency planning reduces the intensity of interruptions and makes the transition from one phase to another organic, thus business continuity stays.
• Strengthens the Bond with Customers: The general perspective is fall of a company begins with a crisis, resilient supply chain contradicts this truth. When business continues, customers’ trust strengthens as there is an assurance- that work will be accomplished.
• Increases Sustainability: A proactive approach identifies weaknesses and expected weak links in the supply chain. Once identified businesses can focus on strengthening infrastructure and be future ready for any interruptions. This creates a long-term sustainable environment.
• Aids Competitiveness: Risk mitigation and adaptive resilience planning aid in becoming more competitive compared to other businesses. Entrepreneurs or businesses become bonafide winners as they have their plans in place to adapt and respond in time while their competition fights to stay afloat.

Supply Chain Optimization Strategies for Mitigating Disruptions

Resilience in the supply chain is the ability to promptly respond to a situation in the most profitable manner without hindering the operations of a company. The only promising way to foresee a situation and keep backup plans ready is supply chain optimization through automation and technology. It can significantly reduce the impact of disruptions, help in the quick recovery of operations post-disruption, and provide end-to-end real-time visibility for risk management. Businesses can consider the following points while formulating strategies for mitigating disruptions through supply chain planning.

• Supplier Diversification: Instead of concentrating on a single supplier for raw materials, services, and other manufacturing or production tools, the source of procurement of resources can be diversified. This ensures if one fails or becomes a victim of sudden disruption, it does not have a close impact on the business.
• Adaptive Supply Chain Networks: Supply chain adaptability signifies the capability to embrace change in the design of the supply chain due to structural shifts or customer attitude and behavior and disruptions. Adaptable supply chain networks modify working modules by providing advanced insights for supply chain stability, crisis management, and creating resilient supply chains.
• Logistics Resilience: Supply chain resilience has an organic relation with logistics resilience. A supply chain can only benefit if there is an integration between logistics and operations. Genesis of 9 out of 10 crises is logistics. It requires mitigation with encrypted risk management policies, for immediate transition from one plan to another. Crises can be in inventory, warehouse, shipping & transportation, customs clearance, at the yard, with the drivers, for last-mile delivery, or during returns and exchanges. It has several openings that require attention, planning, and continuous visibility which is only possible by adopting technology.
• Digital Integration: Automation of supply chain operations is the integration of all the operations for the exchange of data in real time through a single dashboard. Supply chain connectivity builds end-to-end visibility and exchanges analytical insights that further aid in planning and developing a resilient supply chain.
• Cloud Computing, IoT, AI & Machine Learning: Companies who collaborate with cloud-computing solution providers stand at an advantage. Through cloud computing, information can be accessed from anywhere irrespective of boundaries or time zone. This facilitates the continuity of business operations during any kind of disruption and makes the supply chain resilient as recovery time minimizes.

IoT or the Internet of Things, is instrumental in sharing real-time insight and visibility through sensors, barcodes, and scanners.

AI & Machine Learning are the facilitators of advanced technology and the biggest contributor to making supply chain and logistics resilient. It empowers the supply chain by tabling all information in one place with analytical insights, that are further useful in forecasting and making smart decisions.