Talking about a ‘Post-Covid’ world seems odd, especially with the infections and tragic deaths continue to rise across India, and the world. However, I am optimistic that the vaccination drives and the collective will to ‘break-the-chain’ is sure to improve things in the coming future.
And for especially that reason, it is crucial for businesses and executives to earnestly plan for when things turn a corner, and also be realistic about any future crisis.
For the Logistics industry, the Covid-19 pandemic presented two extremely shocking scenarios. The first being a supply shock as manufacturers, suppliers and exporters were shut. And then there was the demand shock, wherein buyers and importers had curtailed operations and were closed for business. The outcome of this was utter chaos and disruption in global supply chains.
Supply Chain Management, at its core, as we all have studied in our management classes, is the end-to-end movement and handling of raw materials, assembly units, finished products, and others. And this is precisely what the supply chain resilience should be built on.
In layman terms, building supply chain resilience would mean a decrease in supply chain risk. Here it is important to note that creating resilience is not an overnight task, and thus, should not be used merely as a keyword or jargon. There are two aspects or hemispheres of successfully building resilience, and the two are not mutually exclusive. On the contrary, they overlap.
The Product Side, with its nodes, links and contact points
The first step towards building resilience is understanding your end-to-end supply chain. Failing to do this will result in a hit or miss outcome. There are two parts to it – the Upstream, which is the beginning of the supply chain and where the suppliers are and Downstream which is the commonly recognized part.
Assessment efforts should begin with upstream – the inbound supply chain. This is where the supply of supply chains happen, and is extremely complex and huge. There are many stakeholders in the upstream space, which puts it at a greater risk, ergo, the need for creating resilience.
For upstream, three components needs to be looked at – transportation & logistics, the suppliers and products.
Transportation, logistics and warehouses, both yours and that of your suppliers’, are your supply chain infrastructure. They are an integral part of your supply chain.
An assessment and subsequent identification & prioritization of critical elements, products, and their components/assemblies. Ranking and determining key suppliers and the transportation / logistics service providers. This would mean also looking at the suppliers’ suppliers, their logistics, forwarders, etc. If their network has problems, you have problems. Risk flows downwards.
Look for gaps and identify weak links in the upstream supply chain and the supply chains within supply chains.
Another important aspect of the assessment is the chain of custody. It is crucial to map and identify the ﬂow of products. Gaps in the flow are red flags that need to be addressed and fixed.
The downstream supply chain is built around your own business facilities – factories, warehouses and/or distribution centers.
Once the results of the assessment are in hand, you are faced with difﬁcult decisions with regard to suppliers and service providers for building resilience. There may be situations where you may need to change or replace some of them. Increased resilience leads to reduced risk.
The second aspect and one of the most critical enablers for achieving resilience is technology. With the Covid cases on the rise, going contact-less seems to be the best way for breaking the chain.
In that respect, Digitization may be the best place to start. Supply chain operations and management processes are document-intensive. Moving from paper to digital makes the process contact-less, and also generates actionable data. This data can be used as input for other processes.
Technologies that need to be explored are:
- Use of Robotics for the warehouses and distributions centres.
- Drones for transportation. They may not make sense at present, but in certain scenarios you need flexibility and flexibility, especially in critical locations.
- Application of Artificial Intelligence and Machine Learning for planning / analytical decisions such as inventory positioning, scheduling and procurement of products and services.
- End-to-end supply chain visibility and integration, to be used along-with the internal warehouse management system and ERP.
- Using cloud computing and services for providing remote access to information and ensuring a disruption-free workﬂow. Cloud also gives you an option to integrate various technologies, both internal and external, to your supply chain.
It is however important to note that technology alone is not the solution to all your problems. Banking on technology alone as a silver bullet for your resilience efforts may not be wise. Instead, technology and digital should become critical enablers for your upstream and downstream operations.
Some key aspects to consider
The process of building resilience across your supply chain begins with knowing your supply chain, its strengths and weaknesses, suppliers, products, infrastructure and service providers. This includes identifying all of the stakeholders and players.
Technology will help in understanding the end-to-end supply chain, and going beyond that.
When formulating a resilience strategy, it is important to note the following:
- Supply chains will consist of both contact and Contact-less elements.
- Some parts of the supply chain can be
- digitized and made contact-less. Products, components and assemblies, however, cannot be done away with. This is precisely why the resilience strategy should be more than just implementation of technology.
- Going deep into the upstream supply chains, beyond your own suppliers and service providers. Problems with the suppliers’ suppliers and logistics are soon going to become your problems, especially during a pandemic.
- Being diligent in looking for gaps and weak links, as they are, by definition, risks.
Towards building a resilient supply chain
Finally, it all comes down to one thing: implementation. Scaling it up, down and across the entire organization, and outside to all the concerned stakeholders. Those firms may have other customers. It is important to put efforts into developing and managing a comprehensive and well-thought out implementations, down to the tasks.
The pandemic has taken its toll on people, organizations and global economies. No one can predict when we can put all of this behind us. However, even if we do not have a crystal ball, we all have a fair idea about the direction and way forward.