How has the pandemic shifted the way organisations manage their supply chains?

The arrival of COVID-19 marked a poignant moment for companies all over the world. With the resulting mass lockdowns and tremendous shifts in consumer preferences, the pandemic quickly managed to exacerbate supply chain issues, bringing to light and magnifying an array of existing vulnerabilities that were previously going unnoticed.

Following the pandemic, supply chains all over the world have continued to face new pressures from what can only be described as a turbulent environment. From the Suez Canal Blockage to the Russia-Ukraine war, supply chains and their shortcomings have been placed under a giant magnifying glass. Significantly, these vulnerabilities have broader implications for most businesses. As a result, this increase in supply chain awareness has moved organisations to adjust their approaches to supply chain management.

Building upon this, the following article will explore how the pandemic has shifted the way organisations manage their supply chains.  

Why supply chains are taking centre-stage?

Before delving into how companies have shifted their approach to supply chain management, we must first outline exactly why supply chains are taking centre-stage.

Historically, after a turbulent period or what business jargon would classify as a black swan event (i.e the 2008 financial crisis), organisations tend to adjust aspects of their mode of operation. In the case of the finance industry, official institutions were forced to “stress test” their balance sheets to “assure preparedness for an economic shock.” Tech companies also faced the same fate after the mass uprise in cyber security attacks. Following the pandemic, supply chains are predicted to follow a similar path with stress tests becoming somewhat of a new standard.

The reason behind this is that supply chain vulnerabilities have and continue to threaten the standing of many corporations. Some supporting statistics have previously indicated that these issues were so dire following COVID that they resulted in up to 75% of companies experiencing negative impacts on their business.

Considering this, it follows then that supply chains have now become characterized as protagonists, or rather, central engines driving the profitability and well-being of companies all over the world. Many organisations recognise this and are now citing their supply chains as primary sources of profitability and value creation. Examples can be seen in many different organisations, including the likes of finance company Charles Schwab Corp. and utility firm Alliant Energy Corp.

How supply chain needs are changing

Prior to the pandemic and the never-ending array of unprecedented events, most supply chains operated off a model that prioritised low costs. Whilst profitable, this prioritisation is achieved by foregoing volume flexibility, which isn’t typically required in circumstances where stock fluctuations and supply chain needs can easily be predicted. 

Unfortunately, with the pandemic and other environmental pressures, predictability is no longer a luxury. It is because of this that supply chains are having to become agile and adaptive. Just as financial organisations stress test to assure their preparedness for economic shocks, so to supply chains will have to prepare for whatever unprecedented events the year 2022 and beyond may bring.

Supply chain management in a post-COVID world

In order to prepare for the unpredictable, companies require greater visibility into their supply chains. Visibility is of particular importance because approximately 92% of leaders affirm that supply chain visibility is conducive to corporate success. Here, visibility is defined as establishing interconnected internal data that allows organisations to monitor production from all stages within the supply chain.

Today, many organisations have already started actively looking at how they can adjust their current supply chain strategy to meet these demands. At the heart of many of these strategies, is the utilisation of technological tools designed specifically to address these issues. A prime example of how technology can be used as a strategic supply chain management tool can be seen in the likes of Coliance.

Possessing over two decades of experience in working with supply chains, the company has an array of technical experts that solve complex supply chain management problems on a daily basis. Utilising their future-ready and scalable solutions, Coliance works to ensure that organisations can better prepare their supply chains for the demands of a post-covid world.

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