How will supply chain agility shape up in the next normal?

How will supply chain agility shape up in the next normal?

How Will Supply Chain Agility Shape Up in The Next Normal?

  • Posted by: Vineet Aggarwal
  • 12/10/2020

As the world still staggers with the coronavirus pandemic, supply chain finds itself disrupted and is grappling with the gravest challenge in modern times. The nature of disruption in the supply chain caused by the pandemic is unprecedented and requires some breathtaking changes in the entire supply chain management to get things back on track.

Supply chain has always been high intensity, high pressure and stressful function; with real-time delivery challenges, shortages, production derailments, supply-demand gaps, production shortages, cash flow issue, quality concerns and related disasters. However, the new normal in the supply chain caused by the pandemic directly transcends and even magnifies the so-called normal catastrophe in the supply chain.

In this blog, we will outline some of the new ways supply chain will have to recalibrate and reconfigure for keeping it more responsive and agile in the next normal.

1. Outsourcing in Supply Chain-as-a-Service

As companies reel through the pandemic, outsourcing strategies will see a dramatic shift. Outsourcing of manufacturing to locations that are cost-effective has been a general tendency for companies and it seems that with production facilities being closed in most of these low cost geographies, the tendency would be to shift production back to domestic circles. However, the global nature of pandemic and consequent lockdowns and restrictions all through the globe, it would not seem prudent, given the uncertain nature of the pandemic in times to come. But, Supply Chain-as-a-Service (SCaaS) is one area where companies will focus in the coming times to consider outsourcing to companies with expertise in supply chain logistics. Outsourcing to these supply chain experts will ensure that your logistics, procurement, planning and distribution can be handled seamlessly by them given their expertise in the domain.

2. Multiple Supplier Base

The pandemic has given new lessons to companies relying solely on single suppliers as their single sourcing strategies has been hit hard. Absence of secondary or alternate suppliers has meant that your dependency on single supplier whose production has been disrupted, or at worse, their production unit had to close down, has led to disruption in your own supply chain - costing your company huge losses. The lessons that pandemic will offer for supply chain agility in the next normal is to have a dual-sourcing strategy across every aspect of the supply chain so that disruption in production unit of one supplier does not hurt your own production and supply chain. You can then call for your secondary supplier to up their production and fulfill your requirements; now acting as your primary supplier base.

3. Automating the Process

The pandemic has ensured that we value how shortage of workforce and absence of labor in the production and supply chain can hurt the entire operation and could lead to the closure of entire business. Lockdowns, restrictions and social distancing measures offer us a peek into any future crisis and builds up a case for automating the entire process and ensuring that robots and machines perform tasks even in the absence of or availability of fewer workforce on the floor. Robotics in manufacturing have always been there for a long time but businesses now will need to rethink on ensuring that they have some form of these automated machines to perform manual tasks. Supply chain agility in the next normal will also depend on how businesses leverage AI powered automation, predictive analytics, machine learning, big data, IoT, and sensors with edge computing for collecting and analyzing the data and to do predictive modelling and demand forecasting.

4. E-Commerce Channels Are No Longer Optional

Digital transformation has been long overdue for many companies across different industries and verticals but the current pandemic has really shaken the digital laggards. With customers stuck at their homes, absence and fewness of customers and physical lockdowns have led to closures of many companies, retail businesses and physical stores owing to fall or complete loss of sales. Customers have been flocking and making purchases, however, on the online portals and digital channels. This makes it essential for every business to have some form of digital presence where they can sell their goods and services online to their customers. Setting up online stores and digital purchase points will be the new normal for companies wanting to survive further disruptions in times to come.

5. Growing Use of Control Towers

Supply chain disruptions and complexities as they exist today would mean that there would be a greater demand for control towers in the next normal. Control towers leverage machine learning to resolve supply chain disruptions with network-wide visibility, management and collaboration. Control tower acts as the central hub which helps employees and managers to centrally monitor and control operations in real-time. Modern control towers provide insights to discover, analyze, and take action in real-time- helping you make decisions that are faster, more informed and responsive. These machine learning fueled systems will empower businesses in the next normal with prescriptive solutions to current and future supply chain complexities and will ensure resilience and agility in times to come.

6. Real-time Visibility with Digital Supply Chain

Digital supply chain will be the new normal in the times ahead with its ability to provide real-time visibility across everything and every aspect of the modern supply chain. It will ensure end-to-end connectivity of every process, every function, every participant and all information. A digital supply chain would mean the companies can now leverage new technologies including Big Data, IoT, Cloud computing, Predictive Analytics, Machine Learning, Artificial Intelligence and Blockchain. A digital supply chain would ensure resilience, agility and responsiveness that is necessary to face the crisis that we are presently engaged with and those that may appear in the foreseeable future.

Count on the New Lessons for the Next Normal

These tough times will act as a lesson to move in the direction of a supply chain management that is more resilient, agile and responsive by adopting technologies that enables us to face the current as well as any new challenges. The lessons learnt today must be adhered continuously i.e. not just during the current crisis but beyond. Any delineation or casual shifting to old ways may prove fatal to the business as the next normal might bring in new uncertainties that may turn out to be more disruptive and lethal.

Over the years, Espire has delivered multiple projects globally in the back-end supply chain & WMS space. Blue Yonder (Formerly JDA) Warehouse Management Solution as our key technology specialization positions us at the forefront in this space, to deliver end-to-end services for logistics organizations who need to stay ahead of the competition. Reach us at marketing@espire.com for any queries and do subscribe to our blogs for latest updates and insights.

About Author

Vineet

Vineet Aggarwal

COE - Logistics

Vineet is an SME for logistics applications especially Warehouse Management Systems (WMS), supply chain, and related ERP systems. He leads the global delivery for new implementations, upgrades, customisation, and integration services at Espire.