Supply chain disruption role: SCRA Comment July 2021
By Joel Dandrea20 July 2021
How lessons from Covid-19 can reshape a robust operating model within global supply chains, Joel Dandrea explains.
While the Covid-19 pandemic certainly created essential understandings about the shortcomings within global supply chains, 2020 also revealed what some have called an over-dependency on resilience that was decades in the making.
Whereas some companies learned how to cope in a hurry, the disruptions underscore how certain forces are coming together to squeeze the world’s supply chains, from the pandemic-driven rise in consumer demand for tech goods to a backlog of imports at clogged California ports, and much more.
With 2021 unfolding more productively (in theory), supply chain flexibility – without cutting corners or pushing investments – should become a renewed focus.
While the supply chain did “hold” throughout the pandemic, it was not a pretty scene, as we can see globally and some experts claims it is barely hanging on.
The disruptions, which come as the US and other economies are beginning to lurch toward some semblance of normality, show how messy the reopening of business is proving to be a year after the pandemic’s onset.
This highlights how vulnerable supply chains remain, because most companies with supply chains are far from where they could be to deal with large-scale disruptions.
While we witnessed the adaptive nature (and the benefits therein) of sectors – like e-commerce, education, remote working, telehealth, etc – throughout the past year, we really did not see that type of vision, innovation nor basic adaptability from the supply chain industry. Truth be told, we haven’t seen it to any great degree over the last few decades.
Improving supply chain management post-pandemic
Contingency plans and risk assessments are an integral part of supply chain management. However, a global pandemic is beyond the scope of most plans.
The complications that arose from companies facing supply chain disturbances, at the same time that consumers’ expectations increased, became overwhelming.
The good news is that the supply chain industry does not have to necessarily reinvent itself to realise substantial improvement. A lack of end-to-end visibility was a reason that many companies were left vulnerable during the coronavirus crisis.
Recent studies have found globally that numerous companies rely on internal data, which is often based on outdated datasets or information that is separated from other parts of the company. The result is that they are limited in their ability to calculate how disruption will unfold across supply chains and business units.
Yet better analytics can assist. What continues to be a point of weakness for many companies is the lack of information from Tier 2 and 3 suppliers. As a result, those that have data further down the supply chain and know that change is happening can better manage both in terms of sourcing and manufacturing.
If you are investing in your talent at the same level that you are investing in the technology, then you require competent people to discern what is the important data from the piles of information companies are collecting. It might not hurt to mention to prospects that supply chain professionals holding a bachelor’s degree earn an annual salary in the region of US$80,000.
It is vital to be aware of the greater understanding that the supply chain is a global issue and not a local one. As we move forward in dealing with the pandemic, and other disruptions that will arise, we must appreciate that we are a global community. As we improve our own relationships and interactions within our individual supply chain mechanism, we only improve the greater whole in the long run.
Recent disruptions should serve as a worthy reminder of what happens within a global system weakened by the collective operational deficiencies put into practice by its many members.