Future-proofing supply chains via localisation and visibility

  • 19/06/2020
  • 10:28
Tags:
  • Client

The COVID-19 pandemic is continuing to change the world of work, impacting the way we communicate and manage businesses, globally. As parts of the world move past peak phases, a refocus on supply chain efficiency is underway.

The traditional low-cost supply and minimal inventory model supply chains are still relevant, but they need to be updated. The supply chains of the future will be remodelled as supply networks, offering greater flexibility, localisation founded on greater visibility underpinned by data, AI, and machine learning. There will be heavier reliance on technology to build flexibility to support more resilient supply routes.

Supply chains of the future

The importance of updating and reviewing supply chains can’t be underestimated, At the outbreak of the pandemic the World Economic Forum (WEF) created the Pandemic Supply Chain Network (PSCN). The aim was to create and manage a market network allowing for WHO and private sector partners to access any supply chain functionality and asset, offering access from end-to-end anywhere in the world at any scale. To deliver this capacity requires visibility of the supply chain and in order to meet this need, the PSCN released a ‘blockchain deployment toolkit’.

The coronavirus outbreak has highlighted the necessity for global supply chain cooperation, and blockchain technologies can help to develop the visibility and trust required. The toolkit details blockchain deployment best practices from over 100 stockholders, including academic institutions, governmental departments, international companies, start-ups and other supply chain experts.

When supply chain protocols are updated, it is key that the right technology and skills are leveraged to maximise benefits and reduce costly risks.

Geographic centres of excellence

The pandemic has disrupted global supply chain norms. Companies are now urged to research suppliers outside of their normal practices by using the newest supply chain visibility platforms.

This approach will allow many local economies the opportunity to reinvent themselves. To reduce the levels of disruption via transaction and inventory visibility, embedded AI data can provide real-time information and opportunities that were not visible before. Plus, a new generation of secured transactions between trading partners can be created if this process is supported by blockchain technology.

Data leaders

The recalibration of supply chains in an era of high demand and supply volatility will require hybrid IT operations teams unique to each organisation. Investment in developing progressive IT operations teams can:

  • Increase supply chain effectiveness
  • Implement better scenario and contingency plans
  • Improve visibility and control
  • Decrease expedite costs and working capital investment

Supply chains will only remain resilient if companies invest in building flexibility and recruit the right skills and invest in the right technology to have end to end visibility of their supply chains. This means building in the ability to leverage localised supply networks when longer, less stable supply chains are impacted. It will be crucial that IT operations teams can identify leading and lagging KPIs, so they can extract, analyse, and transform their organisation’s decision-making strategy.

Supply chain management

Recent changes in consumer behaviour, production and transportation during the pandemic have led to previous algorithmic predictions becoming less reliable. Companies now need to rely more upon demand planners and forecasting personnel, because the predictive data available before, during, and after disruption requires more active interpretation.

The pandemic has highlighted the limitations of computational prediction as a standalone solution. This is driving reassessment of demand forecasting versus direct responses to what managers see in front of them. When recruiting new managers, companies should focus on those who are skilled in making manual corrections to predictive data. However, this has also put skills shortages under the spotlight.

Post-COVID challenges

Current policy is focused on the management of the COVID-19 crisis, but the next steps in the recovery are linked to cooperation between public and private sectors so supply chains are bolstered.

Current policy is focused on the management of the COVID-19 crisis, but the next steps in the recovery are linked to cooperation between public and private sectors so supply chains are bolstered.

The future

Current and future supply chains face many challenges, but this is where the opportunities lay. To develop geographic centres of excellence, to build the physical infrastructures and government-backed education required, countries must invest in their local industries. This will alleviate the concern that automation will cause a loss of jobs. Intelligent employers will use technology to reskill their employees and introduce new talent, embracing the 4th industrial revolution as a force of innovation.