This 2022, the Russia-Ukraine conflict, combined with wider geopolitical implications and the repeated COVID-19 lockdowns in China have caused an unprecedented disruption in the global supply chain, forcing businesses to rethink their entire value chain from raw material sourcing to end customer. Businesses of all sizes have been left grappling with the commercial, operational, financial and organizational challenges posed by these disruptions.
In response, CEOs are looking to the future and seeking to build resilience into their supply chains by increasing investment in disruption detection and innovation processes.
But how can businesses best adapt to the new reality and ensure that their supply chains are future-proofed?
In this article, we will be exploring the key supply chain issues this year and new strategies that are being rapidly deployed to help build resilience and agility.
Upskilling and Adopting New Technology
The pandemic has also caused shortages of manpower and raw material, which in turn led to production delays or even halts. This situation revealed the lack of resilience in supply chains and served as an opportunity for industry leaders to re-evaluate their long-term supply chain strategies. Companies are recognizing the need to prioritize risk management as a key part of their supply chain decisions, while also looking to make their supply chains more resilient and cost-effective. To mitigate staffing issues, organizations should look into the adoption of new technology in supply chain operations, while ensuring employees are trained on required skills and capabilities.
Revolutionizing Disrupted Global Supply Chain
Global supply chains are often unprepared when disruptions happen, businesses are not nimble enough to react and resume proper operations. This has caused a significant decrease in supply of goods. Furthermore, flows of goods into key markets are restricted due to shutdowns of ports and airports and congestion at customs, these ports include the Port of Singapore, Port of Shanghai, Port of Hong Kong, Port of Busan, Port of Qingdao, Port of Tianjin, and Port of Dalian in China, as well as ports in Japan, South Korea, Malaysia, and other Asian countries. We are experiencing a ripple effect across supply chains – shipments are delayed at ports and goods get piled up in storage.
Assuming that disruptions recede and access to sea and airfreight revert to pre-pandemic levels, it might take some time before things return to normal. In the meantime, consumers should expect to see higher prices and longer waits for retail shelves to be replenished, especially for imported products. Furthermore, items requiring repairs and maintenance could be delayed in lengthy service queues. Government and industry leaders are striving to design strategies that increase domestic capabilities, making them less reliant on regional and global supply chains. Companies should consider redesigning supply chain flows, storing inventory closer to customers, and improving last mile deliveries and returned goods.
Broadening Trading Partnerships
Despite the inherent risk associated with having one major trading partner, many businesses have strong relationships with one large customer, one major supplier and/or one major supply chain partner. Businesses have to recognize the need to broaden their trading partnerships by identifying alternative suppliers, markets, customers and logistics providers. In addition, supply chain leaders are turning their attention to third and fourth parties’ ongoing risk monitoring to address inherent, residual, cyber and counterfeiting risks more effectively. Consequently, to increase agility and resilience, businesses are investing in new technologies and services such as trading systems, planning and analytics capabilities.
Investing On Advanced Digital Support System
This year, many companies have made initial investments to automate key nodes within the supply chain, including stores, warehouses, manufacturing facilities and corporate office buildings, in order to enable efficient, effective and safe operations. This level of investment is expected to be accelerated in 2023 as businesses seek to adopt more advanced digital enablers, such as cognitive planning and AI-driven predictive analytics, as well as employing advanced track and trace and blockchain technologies to add greater integrity and visibility into secure supply chains. With the help of these advanced technologies, leading organizations are making strides to improve visibility throughout their extended supply chains.
Future Supply Chains Success Factors
Supply chain issues have been a major topic of discussion for many organizations this year. Although it has affected the flow of goods, there is no doubt that these experiences have enabled businesses to develop better strategies and plans to ensure that these challenges can be better managed in the future. In 2023, it is vital that supply chains possess the following characteristics to stay relevant.
|Digitalized with Relevant Technologies
Processes are streamlined and decisions are driven by data analytics.
|Customer-centric Micro Supply Chains
Decentralize or relocate closer to customers to reduce impact of supply chain disruptions.
|Future-looking and Skilled Workforce
Reskilling and upskilling existing workforce to keep up to date with new technology advances or to maneuver manpower between functions.
|Ethical and Sustainable
Businesses need to start operationalizing their ESG strategy.
TAPA’s comprehensive approach to supply chain resilience and sustainability ensures that our members’ supply chain remains secure and efficient. TAPA Standards and trainings are designed to upskill the industry workforce and empower businesses with the right processes and solutions centric around the post-pandemic needs for the future.
For more information about TAPA Standards, please kindly email to email@example.com.