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How is Your Supply Chain Being Disrupted? Featured

How is Your Supply Chain Being Disrupted? selective focus photography of porcelain doll

The coronavirus pandemic has subjected almost every industry to untold suffering. It has led to massive loss of jobs, closure of businesses, increased taxes and disturbed the supply chain and distribution of essential products. While it was a disaster for the movement of goods and even services, it became an eye-opener to many industry players. The major breakdowns in the supply chain industry on a global scale became a big lesson to the challenges that have for years gone unnoticed. Companies have learned to invest in lean supply chains during the crisis as they grapple with the fast changes than any ever witnessed.

Despite the challenges, enterprises will want to keep their supply chains flexible and fast by implementing the right technologies and practices. While most supply routes were disrupted last year, the success in delivering essential items proves that the supply chain managed to hold, regardless of severe shortages of some medical supplies. Although this is the truth, most enterprises are far from what they should be when it comes to dealing with disruptions at a massive scale. Most of them still face countless problems and are hanging in the balance as the pandemic continues to persist.

One thing that most companies enforced to deal with the disruptions is to prioritize the essential items. While it served its purpose at the peak of the pandemic, it hampered the ability of many suppliers to meet the demand for non-essential products such as electronics, toys, and clothing. The change in priorities also affected sellers since most of them rely on supply chain providers to ship their products to customers.

The manufacturers that rely on labor-intensive processes that require people to work closely together were adversely impacted. The social distancing regulations that came into effect after the rapid spread of the virus meant that the traditional working arrangements were no longer tenable. New alternatives had to be sought. On the other hand, transportation routes were disrupted in the event a truck driver became sick. Predicting exactly where disruptions are felt the most might not be easy, but specific supply chains have suffered.

How companies have handled the disruptions

Moving forward, companies have found various tactics of dealing with supply chain disruptions in 2021. Here are some approaches that we are likely to see moving forward:

  • Outsourcing

Last year, most organizations recognized that outsourcing supply chain activities to specialists would substantially cut the risk, introduce flexibility and give them space to focus on core businesses and respond appropriately to market changes. As the pandemic persists, the outsourcing trend is expected to continue this year onwards. Outsourcing will make supply chains leaner and effective.

  • Digitization

This trend has been in a great upsurge during the pandemic. Although automating supply chains were already on the rise, the pandemic reinforced the importance of digitization. Organizations that had already invested in digital technologies will respond to demand fluctuations that enhance productivity. With the help of technology, supply chain companies can absorb additional product volumes and enable strict social-distancing protocols.

  • Near-shoring

Most companies are moving towards near-shoring to avoid future disruptions like we saw last year.  With the help of technology, near-shoring will allow organizations to oversee greater efficiencies and lean inventories and offsetting increased warehousing and supply-related labor.

The impact of COVID-19 on the supply chain is not short-term. As such, businesses must have a strong and long-term resilience plan within their value chain to face future challenges and emerge strong. This can only be achieved by ensuring there is flexibility to protect business and disruptions. Flexibility can only be achieved through the adoption of technology.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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