Supply Chain Management Takes Centre Stage: Covid-19 Implications

Prefer Listening over Reading? Try SSC Audible...
Voiced by Amazon Polly
Supply Chain takes center stage

Overview

The ongoing pandemic and its implications for supply chains have been far-reaching, to say the least. The integrated nature of supply chains and their globally and regionally dispersed structures have exposed the fault lines and vulnerabilities even further.

The economic and humanitarian crisis brought about by Covid-19 will take time to abate. Micro, small and medium enterprises have struggled to survive. What began as a supply shock eventually resulted in a demand shock too.

Moreover, the challenges caused by lockdowns, un-lockdowns, covid hot-spots, and red zones have constrained supplies, production, warehousing, and logistics operations. The concept of Lean Operations/Manufacturing and JIT (Just In Time) is being questioned. Experts are now talking about JIC (Just In Case) to ensure supply chain resiliency and continuity.

One could view the trends, developments, and constraints from multiple dimensions – People, Process, Systems, Functional, Upstream, and Downstream.

Over the past few months, the events have reiterated and reinforced the need for supply chain agility, flexibility, responsiveness, sustainability, risk management, and working capital controls. As they say – Cash is King after all!

Data management issues have also become very critical – particularly those related to cybersecurity and master data controls. Customer focus and market intelligence have proved to be critical drivers for success.

The need for investments in supply chain automation and digitalization has been accelerated owing to visibility and transparency constraints across the supply chain.

People, Processes, and Systems

Emerging Paradigms – People, Processes & Systems

Let’s take a look at some emerging paradigms concerning people, processes, and systems.

People

Lifelong learning will become the norm moving forward. Re-skilling and up-skilling at periodic intervals would become necessary to survive and thrive. Soft skills such as emotional intelligence would play a key role to facilitate holistic decision-making. Gender diversity and inclusion at the workplace or in the virtual world shall bring in much-needed balance to organizational structures.

Job roles and designations would be refined to include both ‘Specialists’ and ‘Deep Generalists’.

Supply chain career paths would continue to be driven by “T” skills – the horizontal line of the alphabet indicating the breadth, gamut, and scope of functions/sub-processes/disciplines within our domain; the vertical line indicating proficiency or expertise in one or more areas – for example – Demand Planning, Strategic Sourcing, Transportation, Warehousing, etc.

If we delve deeper into the people’s aspects: the primary driver, engine, and nerve center for lasting success – certain core skills come to the fore.

The following skills would need to be cultivated and strengthened given the uncertainties and challenges that we face:

  • Business Analytics and Data Management
  • Problem Solving
  • Critical Thinking
  • Supply Chain Strategy
  • Situational Leadership
  • Technology Landscape and Applications
  • Cross-Functional Management (Multi-Disciplinary Approach)
  • Customer Orientation

Process

Processes across the chain would need to be reviewed, audited, and updated to reflect the market and customer needs. Well-designed, optimized and flexible processes shall go a long way in ensuring stability and would prove to be invaluable in terms of system or technology configuration inputs.

It is suggested to use the time-tested and battle-hardened SIPOC methodology to ascertain and ensure the correct inter-linkages between suppliers, inputs, outputs, and customers.

Supply chain finance processes would gain traction in my opinion. Trade financing and working capital management processes would need to be defined and implemented clearly.

Systems

The emerging trends indicate a future moving in the direction of ‘Everything-As-A-Service’ encompassing software, assets, physical infrastructure, plant and machinery, production equipment, transportation, warehousing, etc. The ‘On-Demand’ and ‘Pay per Use’ model would prove to be beneficial for the service provider and receiver alike.

Simulation-based, real-time, and interconnected systems would augment people’s practices and processes. Human-Material interface systems would garner attention in addition to touchless and contactless workforce management systems.

Supply chain analytics systems would continue to move up the learning curve from descriptive to diagnostic to predictive to prescriptive maturity.

Triple Bottom Line

Ethical Practices

We are all aware of the role and importance of the Triple Bottom Line. Whether we look at it from a People | Profit | Planet perspective or Social | Economic | Environmental prism, it is essential to note that financial success cannot be sustained in the absence of sound social and environmental practices and frameworks. In my opinion, economic success is an outcome or a fallout of the other two aspects.

In this context, it is pertinent to mention the growing sensitivity towards ethical practices in the supply chain. The graphic indicates three supply chain examples and highlights the need to track and eliminate forced labour and unethical practices that violate prevailing laws, regulations, and statutes.

Further Areas of Focus

Flexible Connected and Data-driven Platforms

As can be seen in the graphic above, flexible, scalable, connected, and data-driven platforms should be given precedence over stand-alone functional systems. Moreover, Environment, Health, and Safety systems should be integrated with other modules and compliance must be tracked at periodic intervals through dashboards and other visual analytics tools.

Risk| Sustainability| Demand Shift

As stated in the overview earlier, supply chain risk management is being viewed as an integral part of future supply chain design. Upstream and downstream risk mapping and system alerts could assist different nodes of the chain to initiate timely actions.

The last 6-7 months have witnessed a notable shift in demand for certain categories of essential items through the online space. It appears this trend might continue given the benefits that consumers enjoy through this channel (refer to the graphic above). Needless to say, this would have implications for reverse logistics and supply chain.

Finally, sustainability initiatives, practices, and reporting centered on resource usage, process design, product design, energy consumption, carbon footprint, CHG emissions impact, and scope for re-use, return, refurbish and re-purpose will become the norm rather than the exception since they are deeply intertwined with other priority areas.

Way Forward

Supply chains that are visible, transparent, agile, responsive, collaborative, and well connected would enable and facilitate sustained business growth. A daunting supply chain challenge awaits us – the production, storage, and distribution of billions of vaccines globally. However, given the collective talents of the fraternity, this too shall be overcome with innovative ideas and solutions.

All said and done, these are wonderful times to be a part of this domain, function, profession – something that was taken for granted has gained prominence – thanks to the pandemic.

Leave a Reply