Coronavirus has led companies all over the world to rethink their supply chain model globally. It has exposed the vulnerabilities of many organizations, especially those who have a high dependence on China to fulfil their need for raw materials or finished products.
- 94% of Fortune 1000 companies are seeing supply chain disruptions from COVID-19.
- 75% of companies have had negative or strongly negative impacts on their businesses.
- 55% of companies plan to downgrade their growth outlooks (or have already done so).
Supply Chain Challenges-
- Supply chains lack global resilience and are breaking down in the face of multi-country disruptions.
- Supply chain and operations are becoming more costly and can often represent a company’s highest costs.
- The significant impacts that supply chains have in an economy are not meeting stakeholders’ expectations for sustainability.
- There is a high dependency on the human workforce as the talent gap across supply chains is high.
- There is a lack of flexibility which inhibits the customer demands for personalization and customization.
How to respond to Supply Chain Disruption?
Businesses should address the needs of their people while also handling the financial challenges faced by them. By taking right actions companies can turn the situation around and can make things better faster.
- Companies must build in sufficient flexibility to protect themselves against future disruptions.
- They should also consider developing a robust framework that includes a responsive and resilient risk management operations capability.
- The capability should be technology-led, leveraging platforms that support applied analytics, artificial intelligence and machine learning.
- It should also ensure end-to-end transparency across the supply chain.
- Risk response will need to become an integral part of business-as-usual protocols in the long term
Five supply chain priorities for immediate action
- Put people first:Keep the planning workforce healthy and productive by supporting new ways of working.
- Leverage data to improve visibility: maximize visibility into demand, inventory, capacity, supply and finances across the ecosystem.
- Define segmentation to prioritize demand: carefully analyze demand and define priority micro-segments.
- Build a sales and ops SWAT team: mobilize dedicated planning and execution teams that can undertake multiple interventions and orchestrate responses effectively.
- Evaluate supply chain scenarios: run simulations to predict when and where excesses and shortages are likely to occur as well as running end-to-end scenarios to get actionable insights that will optimize operational metrics.