Difficulties Confronting Leaders in the Supply Chain Sector!
In the face of the ongoing COVID-19 pandemic, supply chain executives have been grappling with a host of challenges this year. These include material shortages and scarcity, lack of supply chain visibility, geopolitical tensions, disruptions from global health crises, and increased complexity and risk exposure [1][3][4]. Prolonged supply-demand imbalances, factory shutdowns, logistical bottlenecks, and geopolitical conflicts have disrupted production and transportation networks.
To address these issues, executives have been employing several strategies. Increasing supply chain visibility and digitization through real-time data, remote monitoring, and automation technologies is critical for better decision-making and flexibility in response to disruptions [1][2][4]. Building resilience and flexibility is another key approach, achieved by diversifying suppliers, localizing some production, and preparing for material scarcity to limit bottlenecks and reduce dependency on fragile global networks [1][2].
Proactive risk management is another essential strategy, integrating comprehensive risk assessments for geopolitical, cyber, and climate threats and planning contingencies beyond just shipment delays [3]. Collaboration and communication within the supply chain, with suppliers, production teams, and across the value chain, have improved agility and response coordination [2].
Leveraging advanced technologies, such as AI, automation, blockchain, and advanced forecasting tools, has also been instrumental in improving inventory management, demand prediction, and transparency, particularly in sectors like healthcare with critical supply shortages [5].
As we move forward, supply chain executives must focus on digital transformation, resilience-building, and multi-industry collaboration to stabilise and future-proof supply networks after COVID-19 disruptions [1][2][3][4][5].
Supply chain visibility is crucial for managing challenges, providing real-time problem identification and quick adaptation. Executives can mitigate this situation by leveraging larger or more consistent order volumes to secure priority from suppliers or to keep costs controlled during periods of volatility.
The reshoring process may take months, quarters, or even years to complete. Renegotiation of contracts and terms will become commonplace due to tensions between customers and suppliers. Reshoring presents unique challenges, such as navigating new domestic partnerships, costs, terms, and processes.
The COVID-19 pandemic has significantly impacted the world economy, particularly supply chains. Supply chain executives need to embrace IoT, sophisticated supply chain management dashboards, and de-siloed management for deeper supply chain insights.
Consistent and rising demand poses a challenge for supply chain executives, as it can lead to a growing backlog of projects. The passing of President Biden's infrastructure bill could stimulate domestic production, necessitating supply chain reshoring.
The cost per barrel of crude oil has more than tripled from $20.10/bbl to $68.50 over an 18-month period. Supply chain executives should aim to maintain favorable terms through long-term partnerships and create favorable relationships with suppliers.
Supply chain executives can expand their supplier pool to secure new partnerships due to strong demand. Material shortages and scarcity are expected to continue in 2022, including shortages of critical materials like building staples, petrochemicals, electronic components, plastics, and more. Fuel rates have also increased, reaching decade-plus highs in 2021.
Leadership that acknowledges and proactively addresses the challenges facing supply chain executives is essential for building a more resilient supply chain. Supply chain executives will need to work closely with production and operations leaders to prevent bottlenecks caused by material shortages. They will also need to prepare for continued high costs during an inflationary period.
- To address the ongoing challenges in supply chain management due to the COVID-19 pandemic, increasing supply chain visibility through real-time data, remote monitoring, and automation technologies is critical.
- Supply chain executives should collaborate and communicate with suppliers, production teams, and across the value chain to improve agility and response coordination in the face of disruptions.
- As the world economy is significantly impacted by the pandemic, particularly supply chains, embracing IoT, sophisticated supply chain management dashboards, and de-siloed management can lead to deeper supply chain insights.
- The reshoring process presents unique challenges and will require supply chain executives to navigate new domestic partnerships, costs, terms, and processes.
- In an inflationary period, supply chain executives will need to work closely with production and operations leaders to prevent bottlenecks caused by material shortages and prepare for continued high costs.
