Whether you agree to this or not, the pandemic crisis hasn’t been anything less than a Black Swan event. Characterized by uncertainty and rarity, COVID-19 has caused immense disruption across all lines of business operations. The one facing serious repercussions is the supply chain and logistics industry.
Upending supply chain operations in multiple ways, the current situation forces supply chain managers to rethink their strategies and adapt to the changing times. Starting with migrating to the work from home culture to meeting the dynamically changing demands of the customers, the supply chain industry is on the verge of a digital revolution.
Albeit the transformation has been part of the industry for long, there are leaders who were just in the middle of change, and COVID-19 happened. So, now is the time to reinvent the wheel and redesign strategies, emphasizing solutions that are digitally-rich and COVID-19 proof. And along with this, ensure transparency, supply chain visibility, and the end to end resiliency.
Sounds too much? Even if it does, it is the need of the hour.
Note that the proposed strategy isn’t something new but the refined version of the solutions that have been in the industry for decades.
Pillars of Supply Chain Management 2.0
- Supply Chain 4.0
Doesn’t seem like a new term, right? Apparently, it isn’t different from what you know. The only difference is that it has turned from being an option to a necessity. In other words, Supply Chain 4.0 is the digital revolution and a luxury turning to need, during, and post COVID-19.
Also referred to as the industrialization 4.0, it involves the application of smart technologies such as IoT, AI, cloud computing, and robotics to execute day to day operations. The sole purpose behind the replacement of traditional processes with the modern ones is to rev up the performance while abiding by the needs to meet end-user demands.
Supply chain 4.0 is the combination of smart tools and processes, each of which aims at bridging the customer-supplier gap while inducing transparency and end to end visibility. Not to forget the ease offered to operate with greater efficiency on a global level.
- Lean but Resilient Supply Chain
Even though the concept of a lean supply chain dates back to the 1990s, it is only now that the notion has garnered attention on a global level. For the uninitiated, lean supply chain strategies focus on just-in-time production of goods. Unlike the agile system where manufacturing is done based on market demand, a lean supply chain aims to produce greater amount of goods with lower variability.
Considering the ongoing events, the lean supply chain might not be 100% efficient and this is where the concept of lean but resilient supply chain peeps in. Resiliency is the ability of an organization to sustain unexpected events and function without succumbing to loss. Supply chain managers that can easily strike a balance or have the knack to tradeoff between resiliency and lean supply chain strategies, would emerge victorious.
A major role here is played by Supply chain 4.0. It is this transformation that turns the industry digitally-sound. Information sharing becomes the norm enabling the supply chain managers to utilize it to its maximum potential. Also, the data gathered can be analyzed and used for prescriptive analysis, streamlining production and delivery. All of this corroborates to the growth and success of the supply chain industry.
- Sustainable Supply Chain
In the wake of the COVID-19 outbreak, the sustainability of the supply chain industry has become a topic of debate. While a few leaders consider it to be crucial, others stress the need to relax their undertakings and focus on other important things.
As per the experts, the ongoing pandemic and its impact turn sustainability more important than it ever was. Not just because of the fact that it adheres to the welfare of society, and the environment but largely because of the changing customer sentiments.
Because buyers are prioritizing sustainable products and vouching for companies that employ similar measures, the supply chain sector is bound to follow the path. It is necessary that the supply chain industry operates in a sustainable manner and focus on improving its business operations without disrupting the environment.
Technology and leaner production strategies play an important role as they help predict demands and reduce wastage.
True that the outbreak has added layers of unpredictability within the supply chain industry. Yet, it can be considered as a wake-up call for the managers and the leaders to gear up and adapt to the situation. The changes manifested by the situation are expected to stay and even after the crisis subsides. The only way to thrive in such times is to embrace digital transformation.
Remember the one thing that will remain constant is change and the ability of the supply chain industry to move along with this change is what outlines their success.