Is your Supply Chain Resilient in a Post-Pandemic World?

12 January 2022

Supply chains are vital to modern life, and they frequently adapt to accommodate minor disruptions and shifts in supply and demand. From a supply chain standpoint, the COVID-19 pandemic was unlike any other and by no means minor. At the start of the new year, 2020, the COVID-19 pandemic (Coronavirus) was detected in in Wuhan, the capital of central China’s Hubei province, and began affecting countries all over the world. The international response to the pandemic has had a substantial impact on global supply chains in every industry and country.

The COVID-19 lockdown measures resulted in production halts, limitations on the movement of people and goods, border closures, logistical challenges, and a slowdown in trade and economic activity. A PWC report notes that 90 countries had imposed lockdowns by the end of March 2020 and at the peak in April 2020, about 3.9 billion people were under lockdown. These measures profoundly affected global supply chains at all stages, from the supply sources to the final customers. The virus’s emergence in China, one of the world’s main manufacturing and distribution centres, impacted the supply of completed and semi-finished goods to nations across the world that rely on China for commerce.

That said, pandemics are not the only threat that can disrupt global supply systems. PwC/MIT makes mention of raw material price fluctuations, currency fluctuations, market changes, energy, or fuel prices volatility environmental catastrophes, counterfeiting and cyberattacks as some of the critical areas of supply chain risk. In the McKinsey Operations Practice’s podcast of 2021, it was reported that these supply-chain disruptions cost the average organisation 45 percent of one year’s profits over the course of a decade. It is for this very reason that business is continuously looking to enhancing Supply Chain Resilience.

According to the Supply Chain Resilience Guide Supply Chain Resilience is the ability of a pre-existing network of demand and supply to deploy surviving capacity, and/or introduce new capacity, under severe duress.

A 2020 Brookings Report identifies the following critical elements for achieving Supply Chain Resilience:

·         Rapid detection, response, and recovery

·         End-to-end, data-driven, supply chain control

·         Effective demand planning processes, and

·         Collaboration of private and public supply chain stakeholders

Read: How to build more secure, resilient, next-gen U.S. supply chains

SAP INSIGHTS states that a resilient supply chains work by:

·         Optimizing production with supply chain planning,

·         Diversifying suppliers and manufacturing partners,

·         Understanding and leveraging data, and

·         Implementing capacity and inventory buffers.

No doubt, digital transformation and contemporary supply chain technology provide organisations with the resilience and competitive advantage they require to adapt rapidly to disruptions. Leveraging technologies as IoT, cloud computing, 5G, AI, 3D printing, and robotics reduces risk, improves productivity, and ensures more efficient operations as a result of resilient supply chain systems.

Written by Staff Content Writer, Raymond Moyo. 

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