Resiliency and the Supply Chain

Resiliency and the Supply Chain Today

Resiliency and the Supply Chain Today: Prior to March 2020, most people in the world knew what a supply chain was. Most had certainly come across the term in the Times or the Wall Street Journal. A great many had probably done a project on it during economics class in school. But few were really concerned about how it all came together. So long as Amazon delivered their latest iPhones, video games, and $200 tennis shoes within twenty-four hours, who really cared how it all managed to happen?

That changed in a heartbeat as with the coming of the Coronavirus. As the infection raced around the world, buying panics exploded and shelves were emptied. (How much toilet paper is still stashed in your garage?) The political response from many governments was to shut down all but the most vital of industries.       

Of course, supply chain companies and consultants still found a way to keep the world’s essentials moving. Day and night on ships, trains, trucks, and planes, however circuitously and despite many a local and national political roadblock, needed products were shipped and delivered. Companies that had planned ahead were rewarded for their foresight and caution. They were able to use their stockpiles to satisfy demand until it was safe once again to fire up the factories, the plants, and the warehouses. Companies that did not, failed, and are no longer with us. 

Nearly two years later, we’re still in the grips of a global shutdown, even as studies confirm what we can all see: that two years of Draconian lockdowns have resulted in a world where there are now more daily cases of coronavirus cases, not less.

Some nations, like Britain and Norway, are lifting restrictions, tired of paying the cost of a failed and ineffective policy. Others continue to issue mandates and shut down borders. Most people simply want to go back to an increasingly hard to remember normal world and can’t grasp why it’s taking so long for the captains of industry to catch up to the loud demands of 7.5 billion people. 

Meanwhile manufacturers of all shapes and sizes struggle under the strain of these conflicting rules, regulations and demands.

And yet this very crisis has unleashed completely unexpected surges of creativity and innovation in an industry once considered arcane and conservative. In the wake of 2020, supply chain companies didn’t have the luxury of simply working remotely, or furloughing workers, or closing up shop. The rest of the business world might hunker down waiting for the storm to pass, but the supply chain community had to figure out how to do business safely and wisely and, yes, profitably, lest the flow of critically needed products and services simply stop, and the world as we know it collapse. 

We now see that the survival of the supply chain industry has become the key to the survival of all industry, and, with the appearance of the global specter of COVID, supply chain firms have been forced to step up to that responsibility and become inventive, unorthodox, pioneering—trailblazing.

A Change of Pace

How have supply chain leaders adjusted to life in the still persistent COVID-19 environment? Perhaps the most impressive way is by rewriting their own expectation levels when those were no longer possible to meet. During normal times, supply chain is a business that relies on precision and attention to detail, and so it desires and assumes a world of relative social and political stability. The velocity of technological development and the ever-increasing speed of modern life had already driven the more far-seeing leaders of supply chain firms to question that assumption, and prepare for wide, rapid, sudden and unexpected shifts in the market.

But as stability and expectations about market conditions corroded in real time, the supply chain industry has had to pivot to incorporate flexibility and ambiguity into its toolkit. When a supplier can’t deliver what was promised, the order of the day is no longer surprise followed by anger and frustration, but rather an extending of the hand to ascertain how both firms can work together to bridge those gaps in the chain to connect customers with the items that they require; and also to have backup plans and alternative routes to carry one through the crisis. The supply chain planner has become a scenarist, no longer seeking only the optimal solution, but generating at the same time multiple alternative solutions with which to respond optimally to a variety of scenarios.

This has become a necessity. I regret to say that, as I write, a new crisis may be brewing that has nothing to do with Covid. Russian troops have been gathering on the Ukrainian border, and the media is full of talk about a potential Russian invasion. America has sent 3,000 troops into the area and issued the Russian government a stern warning that it will retaliate if that happens.

Will it happen? Will America respond with military force? Will Russia respond with even greater force? We don’t as yet know. 

But we who work in the European supply chain industry do know that, should it happen, supply chains affecting all the people throughout the entire continent of Europe will be snapping like so many dry twigs. How deep could the crisis go, what actions can be taken now to minimize the impact, how will one’s company survive? Thought should be taken now. 

One can hope that such a crisis never comes, but hope is not a strategy. It can easily become an epitaph.

New Identities

As supply chain has gone from occasional podcast topic to water cooler and dinner talk, it also has given leaders and major players in the industry the chance to make their voices heard. The supply chain analyst and thought leader is now making the transition from being a “back office” and “behind-the-scenes” voice to having a significant sphere of influence owe the current state of business and its future. 

Just as restaurants had to transition to curbside and contact-less delivery, and department stores began embracing virtual reality to help customers “try on” clothes and model furniture in their homes via screen, so too supply chain analysts have had to reinvent the wheel to keep the shipments coming in the safest, most efficient way possible. Few other industries the world over have had to reinvent themselves as quickly as the supply chain industry has, and those actions have been followed by reflection. 

It is long overdue. If there is one thing of which we can be absolutely certain, it is that Covid-19 crisis will not be the last that the supply chain industry faces. What will a more advanced 3-D printing do to shipping? How will drones or automated trucks affect delivery? How greatly will robotics continue affect factory production?

Covid or not, businesses now face continual, radical, and often unexpected change. Solutions from the past will not solve challenges from the future. Those challenges will need to be addressed with creativity—with resilience.

Digital Rebellion

 When you have an industry as vast and as historic as the supply chain, making structural, fundamental changes to how that industry works never come easily. It usually takes something so disruptive that companies simply must dramatically change or be left in the dust by the competition. Yet how many companies prepare for that inevitable disruption?

Digital technology, the rise of the Internet and all of its complementary technologies, has permeated much of the world over the past two decades. Nonetheless,  for every company along the supply chain that has gone digital, there are a dozen more that were still operating with file cabinets full of carbon copies, paper invoices, and rolodexes with names of every person they’ve done business with over the past twenty years. If a fire or a hurricane hit their offices, there would be no way to recover. 

COVID-19 is forcing that change to come now. Coworkers who weren’t absolutely essential were sent home to work remotely. Paper couldn’t be shuffled around in offices if office workers were home and not at the office at all. To keep them producing at maximum efficiency, paper had to be replaced with digital documents and digital spreadsheets. Conferences had to be replaced with Zoom meetings. When exchanging documents by hand was forbidden by every health official in the world, it became necessary to adapt, reconfigure, and evolve. 

Many knew this was a change that was going to come eventually, and were prepared. In doing so, they not only survived, they unleashed a new era of logistics, of transparency, and of trust between business partners whose territory circumnavigates the world and encompasses every industry known to man.

Final Thoughts

Some find this new array of challenges daunting. I find it exciting.  Through this gauntlet of challenges and limitations, we have kept accelerating forward, devising and envisioning innovative new solutions to every unexpected problem that has come crashing down on us. Embattled, we have faced and surmounted labor shortages, the demand for shorter lead times from consumers, for longer lead times from suppliers, and one speed bump after another. Time and again we have been forced into resiliency, to move out of our comfort zone, take things day by day, and rise to a new level of excellence as we move further forward into this, very brave, new world.

Thought Leadership & Strategy

Supply Chain Risks & Resilience
Artificial Intelligence & Machine Learning
Sustainability and Circular Supply Chains
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