The Covid -19 epidemic has wreaked havoc on the global supply chains. Rising commodity prices, logistics disruptions and port congestion, and changed customer behaviour have impacted the overall supply chain issues. Simultaneously, the push for sustainability is propelling nearly every industry sector towards locally integrated production and services that benefit both people and the environment.
Companies are reorganising their goals and ways of operation in response to changing demand and supply pressures in this rapidly evolving environment. The prevailing supply chain management model in the future is likely to be one with agility and sustainability at its core, as well as effective cash flow management.
Managing demand-supply imbalances:
With flexibility: Demand was highly unpredictable in the months following the epidemic, with dramatic drops in demand due to lock downs followed by surprising bursts of recovery. Most businesses reacted to the volatility by implementing frequent forecasting processes to capture the most recent market signals, changing from monthly to weekly evaluations. These measures only had a minor impact.
Supply planning involves being ready for a variety of eventualities. Most systems calculated solely in-house resources before the pandemic, and raw material supply was not recognised as a barrier, hence it was not addressed. Faber Infinite is Your top choice for Supply Chain Management Consulting. We excel in optimising supply chains for efficiency and resilience.
In today’s world, where supply chains are being disrupted, agility is more important than ever for a successful response. Businesses today must be able to anticipate different scenarios quickly in order to keep up with shifting surroundings. They need to keep a laser focus on planning accuracy – agility and rapid response. A significant success factor supported by digital enablers is visibility beyond the company and collaboration with suppliers and customers.
Cash management is critical for a company’s survival and growth:
Enterprises with strong reserves have largely withstood demand-supply shocks over the past years, whereas smaller businesses and unorganised businesses have struggled. As a result, cash management has emerged as a strategy of assuring organizational survival and growth. Effective cash management has become critical in supply chain processes, especially for growing enterprises.
Companies must contemplate recovery speed and strike a balance between the desire to drive cash and the flexibility to adapt to market demand and flourish. Supply chains must increasingly prioritise speed, establish performance KPIs for lead times, and implement agility. The focus must be on cash management that captures market potentials while avoiding stagnation.
Building supply chain resilience through business continuity:
The pandemic has emphasised the serious supply chain disruptions that black swan occurrences can entail. Poor design and a lack of preparedness and response affect the company because unplanned disruptions come with multi-fold costs that can last for years, and can even lead to the disintegration of organisations.
As a result, today’s businesses should make concerted attempts to strengthen their resilience. Organizations had to place a higher emphasis on a variety of processes, like business continuity, quantifying risk measures, establishing risk mitigation plans, and identifying bottlenecks, in order to protect financial health in the long run. Incorporating flexibility into company strategies and addressing complexity in the value chains should be the key focus.
Thus, there has been a lot of focus on self-reliance and being ‘Vocal for Local’ for having extremely robust and responsive supply chains.
Faber Infinite Consulting’s solutions for self-reliant, responsive supply chains and operational excellence framework for organizations are reaping phenomenal results via supporting with the 3As: Availability, Affordability, and Adaptability to build a robust ecosystem. Faber Infinite is instrumental in designing efficient and robust supply chains for clients across automotive, engineering, F&B, pharma and many other domains.
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Written by Faber Aleena & Compiled by Faber Mayuri