A new supply chain paradigm

Every generation has had its own global catastrophe, whether caused by ourselves or nature. And as every catastrophe challenges societies and cultures at the time, they also challenge the status quo. Yes, things do and will change.

COVID-19 has laid bare weak links in supply chain around the world. And now all involved in the supply chain are beginning (if they haven’t already) to review, reassess and consider other options.

But, did we really get it all that wrong based on the data and information we had at the time (prior to covid-19)? Definitely, many a BCP written within the last 10 years highlighted a number of weaknesses including those we see now, what we did not count on was the fallout of these – the subsequent events that have made the risks to the supply chain multiply as time goes on. China states it is getting its processes back on line, but the bull-whip effect from the panic buying, hoarding and (likely) government actions to limit continued or even secondary covid-19 events, will take its toll for a while to come.

Markets will change as the psyche of the customer changes, and the supply chain will morph into something completely different to today’s. We will probably see a rapid return to “make/buy local’ and although it will not be a complete shift, it will definitely be the critical components (for manufacturers). This change will become a feedback loop, those in the BRICS group will change their inter-relationships as China’s market/manufacturing changes.

As with any major disruptor – not a new invention or new software – but real disruptor a global one, there will be a repositioning of power, as governments rewrite legislation to control the flow of goods (they are already looking at this), countries lose their attraction as costs to obtain goods increase, manufacturing moves back on-shore as companies lessen their reliance on cheap but long supply chains.

Other considerations for the supply chain will be the environmental risks that are now regularly appearing, such as rampant fires, devastating floods and earthquakes – irrespective of where/why/who, the environment will be a consideration. As will the geopolitical world we have woven for ourselves. Future forecasting and supply chain planning will not be limited to cost mitigation, improved utilisation of resources, reduction in inventories and velocity to market. There will be a multitude of risks that will need to be:

  1. Identified
  2. Classified
  3. Quantified and then
  4. Mitigated as best as possible

As I see it, there will be an increase in local suppliers (although not for everything), there will be an increase in the need for information all along the supply chain prompting an increase in IOT and probably, block-chain, along with advanced forecasting software, including AI and predictive modelling. There will also be a need for more collaboration between partners to enhance efficiency plus much more.

Globalisation, will still be around but not in the way we have become accustomed to. And, although we will return to BAU, it will be a new and for a while a very challenging BAU. This is about Change with a capital “C”, it will be an exciting time, for tomorrow will be driven by those who can think laterally, out-side-the-box, have a variety of experiences, a range of skills and not be attached to the “old ways” – at least for the near future.

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