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Submitted URL: https://d12ngg04.na1.hubspotlinks.com/Ctc/2M+113/d12nGg04/VX9S--66Wx0ZW4jbddj1FbvHzW6YVQGc4QLgwDMXl4pV3lScGV1-WJV7CgG6CW4XT2Vd3xZdfYW4...
Effective URL: https://www.elixirr.com/2022/07/improving-your-supply-chain-in-the-post-covid-era/?utm_medium=email&_hsmi=228169849&_hse...
Submission: On October 04 via api from IE — Scanned from DE
Effective URL: https://www.elixirr.com/2022/07/improving-your-supply-chain-in-the-post-covid-era/?utm_medium=email&_hsmi=228169849&_hse...
Submission: On October 04 via api from IE — Scanned from DE
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92E7CB07-F15B-4C5B-895C-18B33B55C731@1x Back
ARTICLE
IMPROVING YOUR SUPPLY CHAIN IN THE POST-COVID ERA
19 Jul 2022 — 4 min read
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The Team
Dorian Isaacson
It’s no secret that supply chains are critical to the success of any business.
The past two years have certainly proven this to be true as companies have
changed how they make purchase decisions and how executives think about their
supply chain strategies – from transforming them to combat shortages, to
tackling what has amounted to $9 trillion of global inflation, all while
competing for qualified labour.
So, what has this taught us? Unsurprisingly, modern supply chains are finely
tuned and indelibly linked. Built up over the past 70 years, they are rigid,
opaque and complex, and with the lasting effects of globalisation, they do not
respond well to rapid change. Ultimately, businesses that don’t modernise and
develop their supply chain strategy will fall behind and fail. Inventories from
the 3,000 largest companies around the globe have risen 6% to 9% of the world’s
GDP since 2016. A continuous drive for efficiency has been replaced with a focus
on resilience.
Staying ahead today not only means executive teams must have clarity on the
following issues when developing supply chain strategy, but they must also
harness innovation in order to tackle these challenges in new and sophisticated
ways. Continue reading to find out exactly how.
A ROSTER OF CHALLENGES FOR MANUFACTURERS
1. Changing production challenges
The combination and domino effect of COVID-19, a lack of raw materials, staff
shortages and a rapid rise in costs have led to fundamental changes around where
production facilities can be based, how the work is done and what raw materials
can be kept on hand. Combined with a structural shift in the labour market,
manufacturers have been driven to invest in automation and robotics. Further,
giants like Apple are diversifying their supply chain away from China, causing
the labour market in Vietnam, for example, to run red hot while manufacturers
try to source the best talent.
2. Escalating global conflicts
Global tensions have added to the uncertainty felt by businesses. Companies must
now review the concentration of their suppliers and the territories in which
they are located as war and trade disputes increase risk – exemplified in the
current fuel price crisis. And so, for perhaps one of the first times,
governments from Europe to India are encouraging firms to develop ‘strategic
autonomy’.
3. Developing environmental, social and governance (ESG) concerns
Businesses are under more pressure than ever to comply with stringent ESG
standards set by consumers, shareholders and legislators alike. Suppliers must
guarantee a higher level of transparency, demonstrating social responsibility.
They must abide by regulations addressing working conditions to environmental
impacts. Shareholders are also placing pressure on companies to review the
sources of raw materials, where they base their factories, and to analyse their
supply chain’s impact on the environment. Businesses need to understand the
level of risk their supply chains expose them to when they are not fully
understood or effectively managed.
DESPITE THESE CHALLENGES, SOLUTIONS ABOUND
While these are just a handful of the issues facing manufacturers today, it’s
important to remember that challenge represents opportunity. There’s a chance
for businesses to evolve into market-leading, industry-defining organisations.
And here’s how…
1. Digitisation and automation
Digitisation and automation are critical components to improve the supply chain.
Developing a mechanism for gathering and analysing data to produce insights is
crucial in modern supply chain management. By digitising your supply chain, you
will form robust connections between each component part, enabling your
executive team to make decisions faster and scenario plan predictively.
Digitisation will allow you to develop a customer-centric supply chain,
predicting demand and assisting in predicting adverse events using artificial
intelligence and machine learning. Automation increases efficiency and lowers
costs. It frees up valuable bandwidth among your team, reduces human error and
generally performs faster and more accurately than manual processes.
2. Visibility
Supply chain visibility is imperative to identify potential vulnerabilities. A
map of the end-to-end value chain highlights the risks suppliers are exposed to
and how they respond to everything from stock shortages to local shutdowns.
Increased supply chain visibility helps businesses anticipate and develop
mitigation strategies that can insulate them from disruptions in what was
previously thought to be a non-related component. A clear supply chain picture
also helps a business understand its ESG impact. Suppliers are held accountable
to ESG targets, and companies can guarantee their effect on labour forces and
the environment.
3. Location
Companies must consider where their suppliers are and build diversification
strategies. An emerging trend of ‘mini-factories’ has led companies to work with
suppliers to re-shore or near-shore miniature production facilities, which
provide considerable benefits, including a reduction in inventory cost due to
location proximity, availability of stock with short lead times and reliability
with production facilities located in the same geography.
Vertical integration continues to drive transformation and has been strongly
adopted by the automotive industry. Original equipment managers (OEMs) are
acquiring everything from chip design companies to nickel mines. Owning the
supply chain allows for additional insights and ensures preferential treatment
in allocating limited stock.
THE TIME TO ACT IS NOW
Supply chains must constantly evolve to keep up with the pace of global
challenges. As experts in manufacturing, we have deep experience, from supply
chain optimisation through to ESG work. Let’s change the game together.
Connect with us today to get started.
* Business strategy
* Manufacturing
* Supply Chain
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