How To Navigate Through Supply Chain Disruptions In Uncertain Times?

How To Navigate Through Supply Chain Disruptions In Uncertain Times?

Addressing supply chain disruptions is challenging. Organizations that do not create a contingency plan to assure continuity throughout the whole supply chain could put themselves in danger. Designing supply chains to withstand the shocks of black swan events and predict risks that could have significant effects on business performance is becoming more and more crucial in today’s fast-paced global economy.

According to industry reports, just 35% of businesses have a formal overarching risk appetite statement, and even fewer—less than 11%—believe that business units should be able to customize their risk appetite. Through 2023, organizations should be ready to deal with supply chain delays, disruptions, and price increases. The cost of air and container freight shipping might increase three to four times more expensive than in 2021.

Due to the strong interdependence of the global supply chain, backlogs in one region of the world might have an impact elsewhere in the world. Geopolitical upheavals are also contributing to substantial container supply shortages, decreased port productivity, and heavy traffic at several supply chain nodes like ports, airports, rail terminals, and distribution hubs, in addition to coronavirus restrictions. Shipping costs will rise as a result of container shortages, supply chain snags, and the high demand for imported goods.

Although air transportation of products may appear to be a viable alternative to maritime transportation, airlines cut back on their commercial flights during the pandemic, making it more challenging to acquire belly capacity. Not to mention that converting from ocean freight to air freight costs almost eight times as much.

When disruptions happen, many businesses struggle to carry out their continuity plans, whether they are dealing with a specific supplier issue, a local catastrophe, or a global epidemic.

Now let’s explore a couple of strategies for dealing with supply chain disruptions.

Establish a solid supply chain infrastructure

After the pandemic, a lot of businesses expanded through acquisitions or by letting business units take care of their internal systems. As a result, throughout the organization’s siloed systems, the same supplier is linked to different vendor numbers. This hinders the ability to make wise decisions even during routine operations. Gathering supplier data from several separate systems is never easy, but in times of crisis, the dangers and responsibilities brought on by segregated data are more apparent.

Companies must realign investments and build capabilities to detect the voice of the consumer to shift from prioritizing operational excellence to commercial innovation for growth. Utilize the insights gained to develop new supply-chain-focused commercial offerings that can be efficiently supplied for maximum profit. A successful response to a crisis that is rapidly developing requires current, high-quality data.

Efficient communication method

Instead of relying on a single communication channel, establish a comprehensive one. It is frequently observed that reaching out to the appropriate person at the right time, with the right information, can make a significant difference during times of crisis. In particular, once data is collected, it needs to be immediately aggregated to facilitate the data analysis required to make important decisions. Unstructured data from spreadsheets and emails make judgments more difficult to make and can waste time during a crisis.

Concentrate on orchestration and visibility

Due to the fragmented and complex nature of international shipping, companies that claim to have an impact on the environment and society must have real-time visibility and transparency. Businesses should concentrate on eradicating global supply chain blind spots. Regardless of the mode, clients should receive the most precise lead times and ETAs (Estimated Time of Arrival) in the business while also knowing the precise position of their products in transit. As targets are attained and new strategies are developed, adjust your sustainability KPIs and accounting procedures.

Embracing digital supply chain solutions

To allow real-time analytics and execution, organizations should consider stepping up their expenditures on supply chain technology. According to predictions, 43% of businesses will keep digitizing and incorporating cutting-edge technology into corporate-wide processes. The future of supply chain digitalization is in alternative intelligence, machine learning, and the Internet of Things, and ongoing technological adaption is essential. Digital solutions provide the necessary flexibility to respond quickly to shifting circumstances and prevent further shipping problems. By giving supply chain managers centralized data, digital supply chains also promote sustainability.

The epidemic has made it clear that a flexible and robust supply chain network is essential, enabling ongoing dialogue at the executive level and coordinating business objectives with supply chain strategy. The supply chain sector will face difficulties this year, but players may get through the crowded logistics landscape if they cooperate and follow a process-driven strategy.