4 Ways to Mitigate New Global Supply Chain Risks

By reacting efficiently and effectively and implementing contingency measures, you can give your business the boost it needs to get through this trying period.

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2020 has been a year of change for us all, with many businesses having to close, adapt and re-open with little notice. With the Coronavirus disease (COVID-19) pandemic and the restrictions associated with it still a threat to the economy, some are calling it a wake-up call for risk managers and other business leaders to work with a 'New Normal' and handle novel global supply chain risks.

When one part of any supply chain fails to deliver, other areas can quickly find themselves in deep water, so whether you've found your reaction times are lagging, or your company ethics aren't quite where they should be in today's society, it's important to use this time to rethink your company's supply chain risk management.

Here are some ways in which you can mitigate these new logistical issues.

Implement a digital supply chain design

Almost everything can now be done on a computer, tablet or a phone. So, it's important to consider that any manual processes that what worked before may now need to be updated in order to handle the novel risks we face in 2020 and beyond.

Luckily, your business can now make use of digital supply networks (DSNs). These aim to reorganise supply chain management to a more integrated model using technology, which allows data to flow in many directions rather than back and forth as it did in more traditional models. The advantage of this is that it recognises that business processes aren't linear, and therefore the supply chain shouldn't be either for the most efficient results.

Similarly, these DSNs are breaking down organisational silos and allowing for improved communication, collaboration, visibility and overall a better optimised supply chain for businesses. The advanced nature of these emerging technologies means they can also help you to stay reactive, even in the most unpredictable of times.

There are so many ways in which DSNs can be practically applied to your business. For example, warehouse management systems can help you to track and control stock movement, which is particularly important in these uncertain times where there are longer, and potentially disrupted, delivery times and services. On top of monitoring stock, DSNs are also handy for managing your workforce, as well as organizing the picking and packing process to make it as streamlined as possible.

With so many shops closing as a result of lockdown restrictions, we're seeing a much higher number of online sales being processed every day. Delivering in a timely manner is now all the more important for customers who are unable or unwilling to go out shopping, and this is where you can benefit from transport management systems. As well as helping you to manage fleets that you depend on for delivery and stock drop-offs, you can also use these systems to optimize your route and track vehicles to ensure everything is running efficiently. Similarly, you can reduce the number of unclaimed parcels by adding a proof of delivery feature.

With the economy so volatile and currently facing uncertainty, now is a better time than ever to automate your business processes. For example, you can use electronic data integration to merge information from all channels to create just one overarching channel, which can supply information on a number of processes. If you're looking to make a bigger investment into your supply chain management, robotic arms can be implemented and integrated with warehouse management systems to increase efficiency and accuracy. These robots work alongside your existing staff members and can independently help with picking and packing to speed up the process, save you time and increase productivity.

Analyze your supplier risk management and adapt For many companies that relied in some way on business relationships with China, the pandemic brought some sticky situations, with many finally understanding why it's important to extend their network and find alternate sources. Doing this spreads the risk across multiple suppliers, so you will have less chance of being left with little or no stock when you need it most.

With COVID-19 continuing to disrupt the economy, there are a number of things businesses can do to protect their supply chain operations. For example, for companies that operate in or rely on impacted countries, it's important that they are sharing useful information about the virus' symptoms and working on prevention. Similarly, planning for increased absenteeism, providing flexible working arrangements and adjusting IT systems to accommodate the everchanging circumstances will be key.

If you source from, or have warehouses in affected areas during this time, you should already have a plan in place for labor planning and developing an extended supply network. If you haven't already, you'll need to consider what the biggest risks to your business are. If staff absenteeism due to the virus is stilting productivity, automation could be the way forward. Similarly, if the demand for your products is becoming higher than can be managed, warehouse management systems can help you balance stock, as well as monitor the picking and packing process so you can see what you can be doing more efficiently.

Optimize global distribution footprints

The novel risks we have been faced with this year has seen many businesses optimize their global distribution footprint in efforts to survive. For example, we've seen many businesses cut back on certain offerings to save money and contend with reduced or restricted stock deliveries, which means they're delivering the lowest possible distribution costs while still satisfying their customers' needs and demands.

However, it's not always easy to strike the right balance between cost and service requirements, as there is so much else to consider— for example, inbound and outbound transport costs, as well as warehouse operational costs. However, both of these can be managed efficiently and effectively by implementing a digital supply network and optimizing your global distribution footprint.

To do this, you will need to compare your usual distribution cost and the service you offer and analyze them against the current climate, taking into account all of the constraints your business has to contend with. This will make you look more realistically at what you're offering is enough or whether you need to be maximizing some areas of your supply chain network to make it more efficient. You will then have to consider scenarios that could possibly occur, or are currently happening, such as coronavirus creating a shortage of stock from your supplier. This will help you to be proactive and filter down future needs in an informed way, such as the decision to add another supplier into the mix.

Alter brand values to reflect customer expectations It's more important than ever to ensure your brand resonates with your target customers, as many businesses are competing for support in these tough times. So, making sure you understand what your customers need and want in the current climate will be key to survival. For example, if you're still finding sustainability is highly demanded among your customer base, changing your brand values to focus on eco-friendly lines and reducing your carbon footprint with deliveries will be welcomed.

The pandemic has brought so many obstacles for businesses and their supply chains. But, by reacting efficiently and effectively and implementing contingency measures, you can give your business the boost it needs to get through this trying period.