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The Positive Outcome from COVID19 to the Supply Chain

Indelible marks were left on supply chain practices and practitioner by the COVID19 but most of these marks were positive. As the saying that goes “never waste a good crisis” the supply chain practitioners and technologists faces the post-pandemic recovery with new systems and practices. Supply chain agility and supply chain risk management is the two most important in these new systems and practices.

Supply Chain Agility

Its the supply chain responds to uncertainties with a quick adjusting operations or tactics while still in a crucial success metrics. Agility came from the digital transformation of the supply chain. To pursue supply chain the supply chain practitioners combined large volumes of real-time data from the IoT and advanced analytical techniques into new insights but the adoption of supply chain agility were accelerated due to the pandemic and was transformed from practice to a strategy.

In every dollar spend on supply chain agility were return 10x against the traditional supply chain planning methods during the peak of lockdowns which is according to the chief supply chain officer of a multi-billion-dollar consumer goods company. The supply chain agility contradicts the traditional method in focusing on efficiency and consequently pursuing the lowest unit cost dream. Utilizing the optimization techniques will minimize the procurement costs while absorbing larger order quantities and longer lead-times. Running the manufacturing longer would drive a higher return on the assets and a full-container load land and marine freight to reduce transportation costs.

Supply Chain Risk Management

Due to the pandemic the risk management were much more appreciated for its role in the supply chain operations. Supply chain is much more like a decision-making game in which the experts decides how much to make, move, by, and sell. Financial cost has always been the deciding factor in supply chains such as: procurement and production costs, the cost of expedited freight, and the cost of unmet orders but due to the pandemic the risk trumps cost has become obvious to many. Risk poses an existential threat to the manufacturer if it was not managed properly.

When making a supply chain decisions the risk must be identified, evaluated and mitigated properly regarding the material sourcing or production. The pandemic has taught us that supply chain is no longer just a cost center or necessary evil, it is now a source of transformational and competitive differentiation.

Article from globaltrademag.com

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