Talking Recovery for the broken Supply Chains


Tue, 14 Jul 2020

3 to 5 mins read


In the current circumstances with restrictions placed on the flow of people and goods across various borders, a severe supply chain shock is being witnessed by the world. Becoming the biggest business disruption due to COVID-19, collapsing supply chains pose many complexities, at various levels, to different kinds of industries.

Supply chains are mostly weakening due to the collapse of ‘Demand’ on one hand and ‘Supply’ on the other. Challenges of the outsourcing modules such as Visibility, Inventory management, Vendor management, and Risk management continue to get amplified and plague the supply chain vertical for the global industries.

Broken supply chains: Food for thought

Supply chains from around the world have been impacted to the severity of three degrees; very high impact, mild impact, and least/no impact; Oil & Gas, Apparel, and Personal Protective Equipment (PPE) to respectively name a few. The specific impacts for all kinds of supply chains fall under the broad categories of Demand lapses, Supply shortages, fulfillment delays, and increased transportation prices besides others.

Supply Chain risk exposure and supply chain resilience on a graph
Inspired by: Bain & Co.

To deal with this crisis at hand, enterprises are compelled to seek cost-effectiveness in most of the situations to sustain the business operations. The ‘Supply’ and ‘Demand’ of these supply chains are the decisive factors for viability of business. So, here are some key aspects to consider:

For highly impacted supply chains:

  • How significant is the drop of demand in your supply chain?
  • Is your capital sitting in warehouses and how does that impact operations & liquidity?
  • Do you have cost-effective alternative suppliers and/or manufacturing facilities that would be ready to respond and act in such situations?
  • Are you regularly exercising scenario modeling & analysis to tactically prepare for addressing both supply and demand variability?
  • Do you have visibility to the challenges that lie at the end of your supplier’s suppliers?

Navigating the Supply Chain Impacts

Answering the questions above, hopefully amplifies the thought process on the lines of:

  • Assessment of actual final-customer demand
  • Capability to respond to this increase/decrease in the demand and predict the buying behavior of customers with cost-effective decisions
  • Ability to project the required levels for workforce as well as materials
  • Securing suppliers and logistics capacity; cost-effective decisions
  • Gauging the financial impact and managing cash and net working capital

As per a report, Investments in supply chain resilience can deliver a 15% to 25% improvement in plant output and a 20% to 30% rise in customer satisfaction.

A supply chain with resilience at the core and digital supply networks (DSNs) that feature end-to-end visibility, collaboration, agility, and optimization are the escapades against the disruption to supply chains.

Why Resilient supply chains are the way forward?

Network agility

With a flexible ecosystem of suppliers and partners, businesses can handle sudden shortfalls or even produce new products

Business continuity

Cloud-based supply chain applications and collaborative platforms and tools can enhance the chances of continued opportunities 

Network visibility

Real-time network visibility ensures that all processes are transparent and traceable, leading to clarity on all fronts

Insight generation

Rapid generation of insights with a focus on predictive and prescriptive analytics is the need of the hour

Empowered teams

Empowered Teams that can meet the workforce challenges and navigate the changes smoothly without any hiccups

Absolute accountability

Sourcing with traceability and predictability is the way forward for supply chains operating on all levels 

The roles played by ERPs to mitigate the impact

Intelligent workflows supported by data and demand insights are compulsory for organizations that are looking to survive the situation at hand and grow beyond the hurdles of uncertainties caused by factors such as the outbreak of a global pandemic. Now is the time to invest in systems such as a cloud-based ERP solution for your business.

COVID-19 is not the end; the shock impact of the pandemic has established the fact that we need to build stronger, smarter supply chains that ensure a lasting recovery. With the future’s potential of novel and maybe even unprecedented events always in store, resilient supply chains are the only way forward.

Next steps

Ask us about our accelerators -  with guided tours we can get you started quickly