The COVID-19 outbreak has caused massive global disruption through all sectors. Companies have an arduous task ahead to recover from this outbreak and there is no better time than now to rapidly assess and response to build a resilient supply chain to withstand the next disaster from having the same impact. Lee Kok Leong, executive editor, reports
Rodrigo Cambiaghi, EY Asia-Pacific and Greater China Supply Chain and Operations Leader outlined some key pillars to build a resilient supply chain.
- Conduct end-to-end supply chain risk assessments and prioritize critical focus areas. Identify changing demand and inventory levels to locate critical gaps in supply, production capacity, warehousing and transportation. Define common goals and an actionable short-term and outcome-driven resilience strategy with breakdown activities among the supply chain ecosystem, aiming to effectively and efficiently leverage additional networks among various suppliers’ pool, production and distribution networks.
- Develop a robust risk management process and diversify supplier network. Enterprises should map out supply chain networks from end consumers to tier-N suppliers. For each supply chain node/arc-like channel, warehouse, factory, supplier, or transportation mode, firms should establish a methodology to measure risk.
- Implement digital and automated manufacturing capabilities paired with strong manufacturing excellence. Leverage automation and IoT solutions for smart manufacturing operations to mitigate reliance on labor intensive processes.
- An agile procurement operations system enabled by various technologies and factoring category strategic priorities across variables such as cost, quality, delivery, innovation, etc. will help drive resiliency.
- Invest in more collaborative and agile planning and fulfillment capabilities. From IoT devices for demand sensing and goods movement tracking to advanced forecasting solutions and social media demand behavior monitoring are heavily impacting how companies understand demand signals and how quickly they can react to them. These capabilities are extremely important for business performance even in normal business conditions and they increase the supply chain resilience in pandemic events like the coronavirus outbreak we are living today.