POSTED : April 13, 2020
BY : Akash Thambiran
Categories: Automation & Operations,Business Optimization
Supply chains across the world are experiencing disruptions due to the rapid spread of COVID-19. Struggling to get their products to market, companies are dealing with shutdowns, stay-at-home policies, and concerns over the health and welfare of their workforce. Most find themselves in the process of reacting to an unplanned situation and needing urgent business continuity strategies supported by their IT divisions.
In this article, we’ll look at the manufacturing industry’s supply chain management, which sits at the center of this disruption and is predicted to be adversely impacted for months to come. How manufacturing companies respond during this recovery period will determine the health of the overall sector as well as access to the products customers need to propel the economy forward.
As of early last month, 35% of manufacturers were already facing supply chain disruptions. This has likely only increased with time as the disease has spread across the United States. The widespread closure of businesses means a reduced workforce to facilitate supply chains, not to mention the disruption to global production and shipping already caused by the pandemic.
The adverse effects of COVID-19 on manufacturing extend beyond just supply chain management. In the below impact index, manufacturing, along with travel and transportation, are suffering severe repercussions across the board. And for any industry with significant supply chain needs, the impacts related to that category are again severe.
Because supply chains are particularly vulnerable during a pandemic, the response to ensure their viability must be vigorous. We’ll look at some of the major reasons for this negative impact on supply chain management, and what IT leadership in manufacturing should consider as they recover and transform their businesses.
According to the Institute for Supply Chain Management, “global supply chains are impacting most, if not all, of the manufacturing industry sectors.” From electronics to construction materials, supply chains are suffering supply shortages and fulfillment issues. One of the primary reasons for these disruptions lies in the supply chain network, the web-like links between organizations that facilitate the flow of materials and goods. COVID-19 has had immediate effects on all the below:
While we’ll likely continue to see negative impacts for the near term, manufacturing companies can take immediate steps to protect themselves from the fallout.
During this black swan event, the manufacturing industry is trying to come up with a solid risk response strategy. Financials and budgeting aside, some of the key transformative steps that businesses would want to take while coming up with their risk response strategy are:
These initiatives, executed with the right technologies, collectively help in the recovery process, while also creating the ability to withstand future disruptions in the supply chain. Without the right technology though, much of your scenario planning will just be guesswork.
The ability of IT leadership to build the right tools and technologies to support the necessary supply chain initiatives will determine the degree of success a company sees during a period of recovery and transformation. But digital transformation doesn’t happen overnight. It should be treated as an evolving and iterative process.
While digital technology enablement will look different from one business to another, there are some common approaches that will help sustain a supply chain recovery process. Below are some digital enablement techniques you should be seriously considering at this time
Digitization of the supply chain management process may prove to be the most important aspect of your risk response strategy. By pursuing cutting-edge solutions, organizations that are accelerating their digital journey will better position themselves to ride out this current disruption and be better prepared for what could be a long road back to normal.
Digitization is becoming more essential than ever, and it’s never too late to start.
See how some of our clients are responding to COVID-19.
Akash Thambiran is a technology professional with expertise in the digital space spanning over 13 years. He has built several web and mobile experiences, engineered to integrate with each other and with enterprise grade business systems through digital platforms using niche technologies. Akash is also a cloud practitioner working with businesses to make the right choices on cloud strategy, from migration to building end-to-end cloud platform solutions. At Concentrix Catalyst, Akash works closely with clients, operationalizing transformational business goals using digital technology platforms and accelerating business outcomes.
Tags: AI, COVID-19, Data, Machine Learning, Manufacturing, Supply Chain