Removing weak links in supply chain

First there was Brexit. Then came COVID-19.

According to the Chartered Institute of Procurement & Supply (CIPS), 86% of supply chains have been disrupted by the pandemic. A recent survey by Accenture also found that only 10% of firms are making their supply chains more resilient to help navigate the uncertainty and the modern, multi-tier setup consisting of hundreds and even thousands of suppliers.

Strengthening Supply Chain Resilience 

Organisations are having to look at ways to strengthen their supply chains in light of recent events which have put their infrastructures under increasing pressure. Even at a national economic and political level, countries are having to ensure that they aren’t so reliant on foreign imports. The UK’s ‘Project Defend’, headed up by foreign secretary, Dominic Raab, is one such example of ‘reshoring’.  

Addressing Disruptions in the Tech Industry

PC makers in particular were badly affected by events, and as office workers left offices in their droves to work from home and with the rise in ‘e-learning’, they simply couldn’t meet the demand for PCs and notebooks. The good news is that computer production is now catching up in the second quarter of 2020 as stocks return to normal. IDC, the US global intelligence provider, calculates that 72.3m units were shipped during Q2.

Leveraging AI for Cost Reduction and Efficiency 

Forecasts that would predict consumer demand with higher levels of accuracy during normal times haven’t been able to cope with ‘black swan’ events like the ones faced in 2020. Hence the growing need for data analytics and data science experts in logistics. Statistical methods and modelling techniques can not only help improve decision making but applying analytics tools enable companies to gain a competitive advantage as efficient supply chain management feeds directly into cost and profitability.

The Talent Gap in Supply Chain Management 

The other big area of development is in artificial intelligence (AI) and machine learning (ML) software that can for example control production processes at a distance without sending engineers on site. AI and ML algorithms provide optimal recommendations to improve supply chain speed and cost efficiency. In fact, research from McKinsey found that 63% of respondents said that revenues had increased while for 44% costs had decreased as a result of AI adoption.

Building a Future-Ready Supply Chain 

A shortage of supply chain talent is also a lingering headache. One reason is the lack of awareness among school leavers about pursuing a career in supply chain, which isn’t just about ‘moving boxes’. The fact that most workers in the industry are male doesn’t help, so as with other sectors like engineering, more needs to be done to redress the gender balance.  

There is plenty for organisations of all sizes to think about. As they have had to learn, if they want to evolve in a fiercely competitive landscape and survive future crises, they must ensure they have a solid supply chain infrastructure.