Supply chains as truly strategic differentiators

The fragility of the global supply chain has never been more top-of-mind than it is now, and it’s time to focus our efforts on more than just restoring our previous capabilities. Instead, we need to build new levels of resiliency into our networks of suppliers and stakeholders. Those capabilities require a hard look at how we collect and use data from across our network, and digitalization investments that can empower businesses to predict and pivot when disruption occurs.

It’s safe to say the supply chain is no longer an overlooked or underappreciated part of the business. Over the past decade, the explosion of e-commerce and consumer expectations ran headlong into the natural disasters and geopolitical uncertainty of our world, and the C-Suite began appreciating robust supply chains as truly strategic differentiators. The pandemic served as an accelerator, putting supply chain top of mind for every business leader. A mid-pandemic IT spending survey from IDC found 57% of respondents had their supply chains “significantly affected,” while another 27% said they were anticipating supply chain disruption soon. 

The IDC survey also highlighted “resiliency” as a top supply chain concern, followed closely by a lack of digital competence to transition supply chains into new business models. The resiliency of your business dictates whether the gap between a business’ slowdown and its eventual recovery will be a wide canyon, or a small trench that can be overcome with smart decisions informed by the right information. But those survey responses indicate many businesses don’t believe they have the right digital tools or expertise to pivot their supply chain operations in the face of disruption or shifts in business focus (e.g., the ability to shift production from producing paper products to nasal swabs).

That inability to respond to change quickly is a problem that needs to be addressed. By using virtual environments to create a collaborative system where all stakeholders can see what’s happened in the past and what’s happening right now, businesses can create simulations to analyze and optimize their paths forward--and find the resiliency to weather a coming storm.

But the lessons we learn aren’t going to change the fundamentals of our industry. If supply chain managers have the agility to respond both proactively and reactively to a demand or supply disruption and can present that insight to decision-makers sooner than anyone else, that business will have a competitive advantage. Virtual twins provide the framework for stress-testing in preparation for the next global disruption. Whether it’s a stuck ship causing a global traffic jam or a natural disaster, companies that invest in resiliency will be positioned to make adjustments and emerge from the crisis stronger than before. 

Source: https://www.industryweek.com/supply-chain/supply-chain-technology/article/21171696/stress-testing-for-the-next-supply-chain-disruption