Adapting to Unforeseen Disruptions with Resilient Supply Chains

Today, every industry is globally interdependant. From exchanging ideas, data, and people to the goods supply chain, we thrive on interconnection. Because of this dependency, a single wave of shock or disruption in production can wipe out 30-50% of a company’s annual earnings.  

Several issues, such as natural disasters, geopolitical tensions, labour shortages, and pandemics, have led to supply chain disruptions in recent years. These disruptions can cost half a company’s annual profits or over a decade. 

The vulnerability and uncertainty of these challenges call for organisations to recognise the necessity of ‘change.’ A modern approach built on the foundation of resilience. This is where technology steps in as a solution. 

How? 

Let’s delve deep into the challenges and tech-driven solutions. 

When did the Supply Chain Disruption Begin? 

Labour shortages, shifts in demand, and structural factors during and after the COVID era led to the emergence of supply chain disruptions. China's shock wave caused trade restrictions, shortages of medical supplies and other products, and a shutdown of the economy.  

Before this disruption, the supply chain operated in the shadows. A pre-COVID era highlighted delayed scheduling or delivery concerns with basic questions:

• Where is my product?
  
• What is halting the delivery?
• Why is the delivery taking longer than usual? 

Today, several challenges, like resource scarcity and fluctuating demands, have heightened uncertainty. This has induced a fear of the future’s unpredictability. Thus, a resilient production planning and supply structure is required. 

What is Challenging the Supply Chain Resilience? 

Proactive and planned strategies in the SCM help overcome the potential risks. Let’s unveil the current threats to the supply chain sector.  

Disruptions across Borders 

Owing to globalisation, even the slightest disruption in a far corner of the world reverberates across borders. Consider the Suez Canal blockage in 2021. The six-day disruption halted the delivery of products from over 60,000 cargo containers. 

As no locality is self-sufficient, 25% or more of resources or manufactured goods in every region are imported. This need for connectivity comes with an outlying risk of turbulences in the supply flow.  

Inaccurate Visibility

In a typical scenario, organizations lead without anticipating the future. According to Forbes, supply chain leaders have not progressed in supply chain visibility over the past decade. Given the unpredictability, closing the visibility gap is critical for seamless SCM. 

Weak Supplier Relationships

Modern business environments demand strong supplier relationships for success. A poor relationship poses severe consequences, such as increased costs, quality issues, and disruptions. A lack of trust, poor communication, and unclear objectives in supply chain management also lead to missed deadlines, stockouts, and production stoppages.  

Imbalance of Inventory 

Inventory management is indispensable for optimising the supply chain. By balancing understocking and overstocking, a business is expected to reduce 10% of its inventory costs.  

Often, suppliers have an imbalance equation of risk of stockouts to their cost of holding. Inventory management ensures there’s never too little or too much stock.  

Surge in Demands 

Consider the case of a pandemic. There was a sudden surge in demand for primary products like toilet paper. Unpredicted demand disrupted supplies, and manufacturers struggled to shift their supplies from one market to another. Rapid surges strain the supply and lead to shortages. 

The Answers to the Supply Chain Challenges 

Process optimisation no longer relies on short-term solutions. In this era of uncertainty, companies need to build future-proof SCM. Let’s look into several factors simulating the sector.  

Diversification 

Rather than relying on a single source, strategize and diversify. Over-dependency on a single location or supplier leads to vulnerability to disruptions owing to the unpredictable challenges in logistics.

Diversification intends to keep the supplies flexible and builds redundancy. Organisations can either set up multiple suppliers for a particular supply or add regional suppliers to mitigate the risk of disruptions. According to the EY Industrial Supply Chain Survey, about 44% of businesses plan more near-shoring activities. 

Flexibility 

The key to success is staying flexible and adapting to changing circumstances. Organisations need predictive analysis, real-time monitoring, and risk management. These modern challenges demand tech-driven solutions.

Organisations need digital, financial, and physical assets to improve efficiency. Supply chain planning software is one solution promoting responsiveness to disruptions. 

Visibility  

Supply chain visibility refers to the traceability of services like order status and shipments. What makes visibility challenging is the modern approach with a diverse supplier network. Leverage the new-age technology to identify bottlenecks and keep track with real-time visibility.  

PlaniSense’s Demand Planning Module lets you expect the demands and plan with performance monitoring and data visualisation. The visibility uncovers risks and minimises reputational damage and costs.  

Risk Assessment 

Conduct a thorough risk assessment and prioritise your actions. Plan for extreme supply-and-demand disruptions. A straightforward technique is to build extreme ‘what-if’ scenarios for quick testing. It helps prioritise parts that are most likely to fail.

The planning process includes analyzing inventory levels and ordering components ahead of the usual schedule.  

Technology in Action  

Technology is one of the transformative forces helping meet the evolving demands of SCM. APS (Advanced Planning and Scheduling) software allows organizations to forecast, plan, and optimize processes. To build a resilient supply, organizations need to adopt future-proof strategies by staying committed to innovation and adapting to emerging tools.

Digital twins will improve real-time analysis and representation of the scenario. Automation can offer efficient production. 3D printing will transform production by decentralizing it. 

How to Leverage Technology for Resilience? 

The supply chain, in the current scenario, transcends beyond physical goods. Innovation in the supply chain has become an intrinsic part of the modern process. Let’s explore how technology helps strategize the process for resilience.  

Digital Twins 

The digital twin lets you build your company’s operations in the virtual space. This approach helps simulate production planning, scheduling, operation, and supply before implementation.  

Real-time Monitoring 

Organisations can track their operations in real-time. Collecting and analysing information at every stage empowers the process. It helps predict possible disruptions and prepares them for preemptive measures. 

PlaniSense’s Supply Chain Planning is one such supply chain software built for resilience. The module offers supply, material requirements planning, inventory optimisation, collaborative working, and many other features for creating an efficient SCM. 

Our model offers customizable and adaptable solutions. These aid in minimizing costs and enhancing customer satisfaction. Achieving operational excellence becomes effortless by syncing innovation with the traditional workflow. 

Traceability with Blockchain  

Blockchain is a digital technology that records transactions among stakeholders. Adapting this technology enhances transparency and records the product’s journey. Companies can trace the product's origin and strengthen collaboration. 

Employing AI for Risk Management 

Artificial intelligence is one of the most robust additions to the supply chain workflow. Having the potential to scan vast datasets, AI helps identify potential risks and opportunities. As a result, the organization foresees the dangers and makes informed decisions.  

Cloud-based Migration

Cloud migration involves shifting information from on-site premises to a cloud data centre. It has affected every business sector, and the supply chain is no exception. More than 50% of enterprises will use industry cloud platforms by 2027 for efficient business.  

Cloud solutions enable seamless remote access to systems and information despite physical challenges. They drive visibility for more informed decisions and anticipate trends across the network. 

Keeping Process Optimization Proactive, Not Reactive! 

Organisations must both anticipate situations and adapt to them. Integration of innovation in the workflow navigates the complexities and ensures continuity.

Digital tools help predict future trends, analyse evolving demands, and track opportunities. Recognise the challenges of the supply chain landscape. As a response, invest in technologies that foster collaboration and empower your workflow. 

Resilience– A Necessity than an Option 

Today, building resilient SCM is a necessity. A strategic approach with production management software ensures that you’re on the right path and can adapt to change. Advanced tools can help you overcome disruptions. 

Organizations must strengthen their workflows to account for potential disruptions. Adopting a coordinated strategy and improving flexibility and visibility can reduce risks, inform decision-making, and increase resilience.  

Consider partnering with PlaniSense to optimize your entire workflow through with technological oversight and industry know-how.