“Businesses need to lead ‘transformational change’ in order to tackle the most urgent threats facing the planet and its people, including a radical overhaul of supply chains… We must work together, because the engine of global business – its supply chain – is broken, and requires transformational, cross-industry collaboration to fix it,” Grant F. Reid, CEO Mars Company.
Based on the above predictive statement before the advent of current pandemic situation, you are asked to choose a sector/industry (e.g., food, technology, healthcare, retail, services, automotive), and critically:
i. Discuss the supply chain visibility and agility, i.e., the ability of companies in the chosen sector/industry to build and manage more cost-effective, efficient, responsible and customer-focused supply chains given the disruption caused by COVID-19.
ii. Identify both internal and external COVID-19 risks for the companies in the sector/industry and discuss how the companies build supply chain resilience to quantify and rebalance those risks by emphasising cross-industry collaboration.
iii. Discuss how state-of-the-art technologies and/or new forms of supply chains (e.g., Additive Manufacturing, Big Data analytics, Internet of Things, Omnichannel, blockchain) help companies within the chosen sector to tackle those urgent supply chain threats and remain competitive during and after the pandemic.
To address the questions related to the chosen sector/industry (e.g., food, technology, healthcare, retail, services, automotive), we need to analyze the current situation and discuss the key aspects mentioned. Let's choose the retail sector as an example for the analysis.
i. Supply Chain Visibility and Agility:
In the retail sector, supply chain visibility refers to the ability of companies to have real-time access to information and data about the movement and status of products at every stage of the supply chain. This visibility allows companies to respond quickly to disruptions, such as those caused by the COVID-19 pandemic, and make informed decisions.
Agility in the supply chain is the ability to adapt and respond rapidly to changing circumstances. In the case of COVID-19, retail companies needed to quickly adjust their supply chains to meet the increased demand for essential goods, while also dealing with logistic challenges and disruptions in the global supply chain.
To build more cost-effective, efficient, responsible, and customer-focused supply chains, retail companies have been taking several steps. These include:
- Building stronger relationships with suppliers and partners to improve communication and collaboration.
- Investing in technologies that provide real-time visibility into the supply chain, such as RFID (Radio Frequency Identification) and IoT (Internet of Things) devices.
- Emphasizing demand forecasting and inventory management to align supply with changing customer needs.
- Diversifying supply sources to reduce reliance on single regions or countries.
- Implementing agile manufacturing and logistics processes to respond quickly to changes in demand or disruptions.
ii. Internal and External COVID-19 Risks and Supply Chain Resilience:
The COVID-19 pandemic has posed both internal and external risks for companies in the retail sector. Internal risks include a decrease in the workforce capacity due to health concerns, closures of brick-and-mortar stores, and financial constraints. External risks include disruptions in the global supply chain, restrictions on international trade, and changing customer behavior and preferences.
To build supply chain resilience and quantify/rebalance these risks, retail companies have focused on cross-industry collaboration. This collaboration involves sharing information, best practices, and resources to strengthen the overall supply chain. Some measures taken include:
- Collaborating with suppliers and logistics partners to identify alternative sourcing options and develop contingency plans.
- Sharing demand forecasts and inventory levels with suppliers to improve production planning and reduce stockouts.
- Establishing communication channels with government agencies to stay updated on regulations and trade restrictions.
- Collaborating with competitors to mitigate supply chain disruptions and maintain essential supplies.
iii. State-of-the-Art Technologies and New Forms of Supply Chains:
The retail sector has been leveraging state-of-the-art technologies and new forms of supply chains to tackle the urgent threats posed by the pandemic and remain competitive. Some of these technologies and approaches include:
- E-commerce and omnichannel retailing: Online platforms and omnichannel strategies have allowed retailers to continue serving customers despite physical store closures. This has helped maintain revenue streams and meet changing customer demands.
- Big Data analytics: Analyzing large volumes of data from various sources helps retailers gain insights into customer behavior, demand patterns, and supply chain performance. This enables them to make data-driven decisions and optimize their supply chains.
- Additive Manufacturing (3D printing): In certain cases, 3D printing has been used to produce essential goods, spare parts, or components locally, bypassing traditional supply chains and reducing lead times.
- Blockchain technology: By using blockchain, retailers can enhance supply chain transparency, traceability, and accountability. It improves trust among supply chain participants and helps prevent fraud or counterfeit goods.
- IoT and RFID: These technologies provide real-time visibility into the movement and status of products, enabling better inventory management, tracking, and efficient supply chain operations.
In summary, the retail sector has been addressing the challenges posed by the COVID-19 pandemic through improved supply chain visibility and agility. By leveraging technologies and collaborating across industries, retailers aim to build more resilient supply chains and remain competitive during and after the pandemic.
I will discuss the automotive industry as the chosen sector for this analysis.
i. Supply chain visibility and agility in the automotive industry:
The COVID-19 pandemic significantly disrupted the automotive industry's global supply chain. Lockdowns and travel restrictions affected the availability of raw materials, manufacturing operations, transportation, and demand for vehicles. As a result, automotive companies faced challenges in ensuring supply chain visibility and agility.
To build more cost-effective and efficient supply chains, automotive companies focused on enhancing visibility into their supply networks. They adopted technologies such as real-time tracking systems, data analytics, and digital platforms to monitor their supply chain operations. This improved visibility helped companies identify disruptions and make proactive decisions to mitigate their impact on production and delivery.
Furthermore, agility became crucial for automotive companies to respond to changing market conditions. Many companies adopted flexible manufacturing processes, including modular production systems and just-in-time inventory management, to quickly adapt to fluctuations in demand. They also engaged in cross-industry collaboration, such as sharing resources, insights, and best practices, to optimize their supply chain operations.
ii. Internal and external COVID-19 risks and building supply chain resilience:
The automotive industry faced both internal and external risks due to the pandemic. Internally, companies had to manage workforce disruptions, such as labor shortages and implementing social distancing protocols. External risks included supply chain disruptions, reduced consumer demand, and changing government regulations.
To build supply chain resilience, automotive companies emphasized cross-industry collaboration. They worked closely with suppliers, logistics partners, and other stakeholders to identify risks, develop contingency plans, and share resources. This collaboration helped in diversifying supply sources, exploring alternative transportation routes, and ensuring continuous supply of critical components.
Companies also focused on reducing dependencies on single suppliers and countries by seeking regional or local sourcing options and investing in localized manufacturing capabilities. By diversifying their supply chains and building collaborative relationships, they aimed to rebalance risks and improve resilience.
iii. State-of-the-art technologies and new forms of supply chains in the automotive industry:
State-of-the-art technologies have played a significant role in helping automotive companies tackle urgent supply chain threats during and after the pandemic.
Additive Manufacturing (3D printing) has provided automotive companies with the ability to produce components locally, reducing dependence on global supply chains. It enables rapid prototyping, customized production, and the flexibility to adapt to changing demand patterns.
Big Data analytics has allowed companies to analyze large volumes of data from various sources, helping them gain insights into demand patterns, supply chain vulnerabilities, and optimization opportunities. By leveraging these insights, companies can proactively address risks and enhance decision-making.
The Internet of Things (IoT) has enabled greater visibility and connectivity within the supply chain. Sensors and connected devices provide real-time data on inventory levels, production status, and transportation conditions. This data facilitates better planning, inventory management, and supply chain coordination.
Omnichannel strategies have become more critical for automotive companies to reach customers effectively. With the increasing emphasis on e-commerce, automotive companies have leveraged digital platforms and online marketplaces to directly connect with customers and sell their vehicles or spare parts online.
Blockchain technology offers enhanced transparency and security in supply chains. Automotive companies can use blockchain to track and verify transactions, ensuring traceability of components and facilitating compliance with regulations.
By adopting these technologies and exploring new forms of supply chains, automotive companies can mitigate supply chain threats, improve efficiency, and remain competitive not just during the pandemic but also in the post-pandemic era.