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Rapid spread of Coronavirus, from China to the rest of the world, has been an unprecedented shock for global supply chains across all industries. According to WTO, global merchandise trade for 2020 is set to plummet by 13% to 32% due to covid-19 with biggest impact on North America and Asia.
Legacy supply chain structures were already susceptible to disruptions like a pandemic, geopolitical changes and natural disasters. Covid-19 has exposed this vulnerability, resulting in loss of revenue, customer churn and diminished market value for businesses. It has compelled global enterprises to introspect their existing supply chain models and take necessary steps to bring in core elements of risk management, business continuity planning, and technology innovations in their overall supply chain strategies.
Organizations need to create an agile, robust and resilient supply chain that will not only help to survive in case of adversity but also thrive in the future. This includes:
Businesses need to recognize risks and threats in their current establishment and build defence mechanisms like leveraging risk management tools and frameworks to safeguard against multiple disruptions, develop a culture of risk-awareness, and have quick and effective contingency plans ready.
Suppliers should be categorized based on their risk profile and necessary contingency plans should be in place for high risk suppliers. Organizations that have a smart supplier management process can rapidly mobilize critical supply-chain components.
Here are some of the digital technologies that can help to simplify processes, enhance visibility and future-proof supply chains:
AI and Big Data Analytics
Advanced data analysis can give Chief Supply Chain Officers (CSCOs) real-time visibility into how consumers respond to the virus. For example, data shows that Italy saw an 81% jump in retail sales compared to the same week in 2019, during the first week of nationwide lockdown. Big data and Analytics enables enterprises to anticipate demand in advance and provides ability to contract and expand production accordingly.
IoT
Real time shipment tracking and storage condition monitoring are two key aspects of IoT deployment in supply chain. It improves the forecast accuracy of shipment delivery, leading to increased end customer satisfaction, better warehouse planning and risk mitigation.
Emerging Technologies
Emerging technologies like Blockchain, Robotics and automation have great potential to add value to supply chains. Blockchain applications like real time traceability of load, smart contracts and fraud detection etc. can bring more trust, transparency and efficiency in the overall supply chain.
On the other hand, Robotics and automation tool can streamline and accelerate tasks and processes that were once performed manually. Automation can help in reducing worker fatigue, increasing efficiency and driving economic benefits.
The COVID-19 pandemic has certainly shifted board room discussions to reinventing their supply chain strategy to avoid a similar fate in the future. Business executives have realized that they need to identify the weaknesses and loopholes in their existing processes and systems, and create a sustainable, future-ready business model with technology as its backbone. Only those, who will ride on the wave of digital transformation will survive, thrive and outpace the competition.
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