The pandemic continues to affect supply chains today as digital supply chain management and real-time visibility become ever-more essential to the disruption-ready enterprise.
Key Takeaways:
- At a time when supply chains are facing unprecedented disruption, only 48% of companies say they have visibility into their tier 1 suppliers while 11% have no visibility at all
- Only 21% have tier 2 visibility and 2% can see tier 3
- CEOs have long neglected the supply chain but are now seeing COVID-19 and other disruptions as a real threat to the economics of their companies as well as the countries where they operate
- Some experts say the current disruptions will last another two years
- It’s not just you – many large companies are now making just-in-time investments in robust supply chain management platforms
Two years after the start of the pandemic, COVID-19 variants continue to spread throughout the world, and supply chains continue to be plagued with uncertainty. It now seems that planning for a post-pandemic world was premature. China’s zero-tolerance policy and lockdowns are bringing bottlenecks to ports while creating supply shortages at the same time.
Businesses can’t afford to let their guards down but knowing what to do now and how to prepare for a far-from-certain future can be tough. When will the crisis be over? No one knows. A more dangerous variant could emerge and bring supply chains to their knees once again. Governments around the world are also dealing with the virus in their own ways. Some are taking the approach of living alongside the virus, but a lack of worldwide consensus and vaccinations mean there are certain to be more lockdowns.
As we complete the first quarter of 2022, just what are the enduring impacts of COVID-19 on the global supply chain? How can you adapt the management of your supply chain to meet the challenges? And what can you do to prepare for something you can’t predict? It’s a stressful situation. Let’s look at what’s happening, some strategies to help you protect yourself now, and how best to equip yourself for what might come.
Supply Chain Resilience Comes to the Fore
Supply chains are invisible until they aren’t. They work behind the scenes as the hidden mechanisms that drive the global economy. Everything from semiconductors to lumber is in short supply, and even if there is no shortage, there are delays and disruptions.
The disruption isn’t just in the supply chain – it’s also shaking up company leadership. Supply chain turmoil and other issues mean 72% of CEOs are worried about losing their job because they simply have not been paying attention, seeing the supply chain as simply transactional and something that could be handled by their COO. These same CEOs have finally woken up to the fact that supply chain issues pose a threat not only to their own company’s growth but to the economic growth of their country.
There’s been a lack of strategic thinking. The supply chain is inextricably linked to overall company goals. The pandemic served as a wake-up call that company leaders should be thinking of their supply chain as something that can drive both value and performance. With some experts saying that the supply chain crises could last another two years, it’s imperative that companies take steps to create resilience now that will last far into the future.
Creating Resilience
Visibility: It is possibly the most important tool in supply chain management. It’s a growing realization, but many companies are operating blind. A recent survey showed that:
- 11% of those polled said they have no visibility into their supply chain
- 48% say they have visibility into their tier 1 suppliers
- 21% say they have visibility into tier 2
- 2% have visibility into tier 3
Without real-time visibility, you do not have the information you need to make real-time supply chain decisions. You can’t quickly flex to handle unexpected changes, you can’t see bottlenecks, and you can’t see the challenges your suppliers are facing that affect final product quality. Lack of visibility means you don’t have the information you need to take swift, corrective action. Internally, siloed systems hamper access to important data.
It’s imperative to know your supply chain. You may know your suppliers, but your suppliers have suppliers who have suppliers. Do you know where your chokepoints are? Do you have single-source suppliers? Do you know where your risks lie?
Risks can come from anywhere – raw material sourcing, production, and finished products, to name just a few. What about vulnerabilities in your supplier’s supply chain? As lockdowns and wide-spread COVID-19 variant outbreaks occur, you need real-time visibility to assess risks and gain true resilience.
Real-Time Visibility and Resilience Take a Digital Platform
A sad fact is that some, if not many, of the companies in that survey will find themselves in supply chain snarls that cause them to lose some, if not all, of their business. This is unfortunate since the technology exists that can turn their opaque supply chains into a bright light that powers their truly resilient enterprise.
It’s about taking your supply chain to the next level with a digital platform that offers:
- Integrated business planning (IBP) across products, channels, resources, and investments, so your supply chain is working to support your business goals
- Real-time visibility to see what’s really going on in your supply chain
- Data management that connects multiple systems to drive visibility for better decisions
- More accurate supply-and-demand forecasting.
With total supply chain visibility, you can better manage your vendors. Collaboration in real time is essential; resilience requires buyers, suppliers, and other stakeholders to share data. This provides a transparent look into every supplier tier.
At a time when companies are taking a hard look at the supply chain models they have been using, just-in-time systems are being examined because they break when there are component shortages. Some companies are stockpiling key parts just in case they can’t get deliveries in the future.
What will your supply chain resilience strategy be?
Conquer Supply Chain Challenges in 2022 and Beyond
It’s possible to see everything going on in your supply chain so you can gain the real-time visibility you need to manage supply, demand, vendors, data, and the overall profitability of your enterprise.
The Logility® Digital Supply Chain Platform accelerates the sustainable and resilient digital supply chain by leveraging data-driven tools such as advanced analytics, ML, and AI to empower your business with greater visibility. This means better sourcing decisions, more accurate planning, accelerated cycle times, improved precision, and increased operating performance.
We help organizations sense and respond to changing market dynamics and more profitably manage their global businesses to become resilient, sustainable enterprises. It’s time for a digital, sustainable supply chain. Reach out to our specialists today to discuss our supply chain solutions.
