Bypass uncertainty: Six steps to supply chain resilience
COVID-19 has had a monumental impact on supply chains worldwide. As countries close their borders, and each component of the production and distribution process adapts to social distancing measures, the pandemic has caused disruptions to 94% of Fortune 1000 companies. And it’s not just businesses that are being challenged to manufacture and distribute their products; the pandemic is creating a humanitarian and societal emergency too, with disrupted supply chains hampering the supply of provisions and equipment to key workers on the frontline of the medical response.
With this in mind, never before has the importance of supply chains – and the impact they play on business maintenance and growth – been more apparent, with 55% of businesses worldwide downgrading their growth outlooks as a result of the pandemic. The fact that employees across the chain – whether they’re involved in production, processing, distribution, sale or delivery – are also considered key workers, is further testimony to the integral role supply chains are playing in business responses across the globe.
While COVID-19 has become a key consideration for supply chains worldwide, how to navigate the obstacles it has thrown up is a challenge that organisations are still in the process of overcoming. And if there is one thing we can be sure of, the challenges the pandemic presents to businesses will continue to evolve, meaning that supply chains must constantly be quick to react and adapt to them too.
The work of Ventilator ChallengeUK and the consortium’s success in setting up brand new supply chain and manufacturing capabilities to help increase the volume of ventilators across the UK at speed is a good example of what can be achieved by quick decision making and effective supply chain reinforcement. And this reinforcement – where visibility in the end-to-end supply chain plays a critical role - can be achieved by other businesses too, which, coupled with employee safety measures, will ensure more resilient operations.
With this in mind, there are six things that should be considered for businesses that are looking to build or maintain supply chain resilience.
1. Preserve the extended workforce
It goes without saying that the protection of their physical health is crucial at this time. Data and analytics technologies that analyse trends between safety incidents, policies, training and monitoring have been deployed in manufacturing and fulfilment centres. Now, with health and safety concerns even more prevalent in the age of COVID-19, companies can apply these technologies to monitor safety of revised working protocols, especially physical distancing.
Businesses must ensure they are supporting employees’ mental wellbeing too. Creating a culture where employees feel looked after and can be forthcoming with their concerns has never been more important. People are the most critical part of any supply chain; when people thrive, the supply chain thrives.
2. Repurpose your capabilities
There are aspects of the supply chain – whether it’s manufacturing processes, fulfilment centres or logistics teams – that can be repurposed to help societies and/or local communities manage the urgent challenges of COVID-19, this will go a long way in giving your business and employees an even greater sense of purpose throughout the pandemic, in turn boosting their pride, motivation and long-term loyalty. Numerous organisations have pivoted their supply chains for wider social good – whether it’s alcohol brands gearing their production lines towards hand sanitiser, or fashion brands turning their hands to the production of PPE – and as the pandemic continues, it’s not too late for other businesses to follow suit.
3. Secure the supply base
Every single business and supplier within the supply chain is fundamental to the long-term resilience of the cohesive whole. It’s therefore essential that individual suppliers are audited across networks, helping them to identify and forecast any operational or financial risks. In the case of a pharmaceutical company, for example, a digital supply chain platform can connect the supplier network to ensure that enough ingredients are procured to sustain production volumes of essential medicines. Offering support and guidance to the network – in particular by staying true to commitments to small and medium-sized businesses or working with government bodies to keep investing in the shared success of local ecosystems, and viewing it as an extension of your business, will prevent mass disruption further down the chain and to business operations.
4. Respond with confidence and insight
A resilient supply chain is likely underpinned by a digital and analytics backbone. Combined with automation and digital twin technologies, businesses can forecast disruptions, hypothesise the best response models, and then test them digitally to ensure their effectiveness. Channelling this data-driven insight into a business’s actual strategy means businesses can respond to the challenges presented by COVID-19 with confidence, helping them to outmanoeuvre uncertainty across the entire supply chain.
5. Learn and evolve
With the speed of transformation required to adapt to market conditions, COVID-19 is the ultimate testbed for supply chains worldwide. It’s a once-in-a-generation opportunity to identify points at which the supply chain is failing, what’s causing it, and how it can be improved. While the disruption businesses are facing is monumental, they should also take this learning opportunity with both hands – if they do, they will likely emerge from the crisis stronger than ever before.
6. Reshape for the future
While COVID-19 shows no signs of abating just yet, businesses should begin preparing for once the pandemic has passed and economies rebound. Things to be considered include continued investment in technologies and digital platforms, maintenance of any changed processes across the network, as well as the purposeful and responsible outputs of the supply chain that were developed during the crisis... but also some fundamental changes around manufacturing and supply network for better de-risking. It’s about channelling observations and learnings made during this time, whilst also staying one step ahead of market conditions.
Developing true supply chain resilience requires significant investment in the people, processes and technologies that make up every part of the network. Whether it’s focusing on the purpose and responsibility supply chains can play in the wider community, ensuring the mental wellbeing of staff, or implementing burgeoning technologies such as automation and digital twinning, each of these aforementioned steps form part of a wider cohesive strategy that will help ensure supply chains are built to outrun the challenges they face, whatever they may be.