Resilience in Supply Chain Network:
COVID-19 pandemic has disrupted the current Supply Chain across industry segments. The organization is struggling on multiple fronts, from wondering where their supplies are coming from to how much to produce. While some of these problems are not new in the supply chain, this pandemic has thrown them into our faces more than ever.
According to experts, the root cause of these issues is the linear supply chain, inadequate supplier risk management, and a high degree of vendor concentration. While these factors result in lower costs, optimized inventories, and economies of scale, the current situation has pushed us to re-think some of these strategies.
Supply chain resilience, for that matter, the strength of every process, is a measure of the ability to resist the disruption and speed of recovery from the interruptions. For example, how long can you continue your manufacturing when a supplier has issues (resistance), and how soon can you re-start delivering to your customers when the lock-down is lifted (recovery).
Area Affecting the Supply chain Resilience:
The key to supplier resilience is predicting the risk and creating alternates. Current supplier risk management has two significant issues, i.e., the risk is managed only at tier-1 suppliers and mostly at lagging indicators, e.g., financial factors and not taking into consideration the other factors like geopolitical and global factors. Comprehensive supplier risk management is needed to decide if there is a need to look at an alternate set of suppliers in a business unit or particular geo. Strong AI and ML dark models are available to give you a comprehensive view of your supplier population.
Distribution and Fulfillment Issues:
Distribution and fulfillment issues are rooted in how the organizations manage their warehousing. There is no flexibility built into the warehousing network design, and there is far too much centralization. Industries are struggling with either too much inventory, e.g., fashion retail, as there is no movement. On the other hand, grocery retail and PPE are working on completing the demand as there are no inventories. Both situations need just-in-time warehousing. On-demand warehousing is the need of the hour with the ability to buy space with no or minimum capital expenditure. Start-ups like warehousity are trying to solve these problems.
This article is contributed by Rajan Kashyap, Head of Solutions and Blockchain Centre of Excellence at Birlasoft based out of London!
Along with leading the Global BlockChain initiatives of the organization, he is also an Industry Fellow at the Centre of Blockchain Technologies, University College of London. He advises Warehousity on Technology!