Exposing various vulnerabilities in global supply chain systems, the coronavirus pandemic has raised awareness about the importance of choosing, maintaining, and replacing supply chain vendors.
While much emphasis has been placed on maintaining supplies and keeping customers satisfied, at some point, supply chains must be evaluated. Operations are not as efficient as they were before the pandemic. Companies across all industries must deal with budget tightening issues and look for the most effective money-saving processes.
Re-evaluating the Supply Chain Model
Supply chain designs have traditionally been built on the concept of free-flowing materials throughout the world. This dynamic has shaped the cost-cutting processes for sourcing, production and distribution. The COVID-19 pandemic, however, has disrupted supply chains so much that experts must rethink the entire supply chain paradigm.
It’s important for suppliers to learn from the pandemic and adapt to meeting the extreme challenges it has posed. Digital transformation is at the heart of this fork in the road to reimagine how supply chains should operate. A major key will be to implement intelligent workflow policies that lead to more efficient, smaller supply chains. IoT devices must collect relevant data that shapes short-term decision-making for reducing costs in the supply chain.
By adopting IoT devices, AI machine learning software, and cloud-based automation services, companies will be able to improve response time. Using next-generation technology allows firms to enhance demand planning and manufacturing processes. The more data your monitoring system collects, the more you can help your entire supply chain become more responsive through sharing critical information in real-time.
Overcoming Supply Chain Disruptions
During these unprecedented times, some suppliers must deal with increased operational and service risks, which can affect the continuity of customer orders. Others are finding it difficult to produce as much as they once did due to a shrinking budget and reduced staffing. However, the strongest suppliers are those that have overcome unexpected disruptions during the global pandemic.
Suppliers that are in a good position for maintaining business relations are those able to assess short-term and long-term capacity data they can share with the supply chain system. Making these assessments available as soon as possible helps a supplier stand out as clear on its navigation and how it deals with disruptions.
Three key areas for supply chains to emphasize for survival are:
- Balancing Risk Management and Flexibility – Smart technology provides data for assessing risks, which helps in decision-making when preparing for large-scale events that can massively impact your business, like natural disasters and global crises. Flexibility in handling inventory is important for adapting to supply shortages and changes in logistics routes.
- Gaining Global Attention and Intelligence – Real-time data from AI and IoT systems can be used to develop supply chain insights. One way to maximize insights is to combine a control tower, IoT, AI and blockchain technologies to track global activity within supply chains.
- Rapid Response to Challenges – Companies must be prepared to respond rapidly to sudden changes in supply chain inventories. An effective way to speed up communication is to utilize data-sharing platforms so that multiple parties can resolve issues in real-time. AI systems can now continuously analyze structured and unstructured data to help map out backup procedures during disruptions.
IBM serves as an ideal example of an organization that has put these systems in place in order to adapt to the new landscape. Using smart technology, the company has learned how to identify early warnings so that suppliers have actionable information for adapting and responding to supply disruptions. IBM also uses AI systems to optimize orders and focuses on communication with customers, suppliers, and stakeholders for quick response.
Rethinking your supply chain system should be a top priority in the near term to ensure you’re working with the best suppliers for your needs. Since supply chains are an integral part of the global economy, it’s imperative to take a proactive approach at evaluating them to prepare for the future.