Every day we hear of congested ports, offsite shipping containers, record freight rates and other disruptions that defy a simple answer.
Well, once ports are finally cleared and tariffs are lowered, the way we manage and think about the supply chain will be very different.
Learn more about Supply Chain in our blog The silent threat of the supply chain
The supply chain is now a key axis of the C-suite
In October, business CEOs surveyed by McKinsey for the first time identified supply chain unrest as the biggest threat to the growth of their organizations and economies in their territories, greater than pandemic, labor shortage, geopolitical instability, war and house problem.
Bank of America further noted that «supply chain» claims on Fortune 500 company earnings calls in the third quarter were up 412% from the third quarter of 2020 and 123% from those of second-quarter 2021 earnings, once the boardroom has focused on the matter. already white-hot.
Trading continuity is more relevant than prices
These drivers are still relevant, but the unprecedented chaos caused by the Coronavirus has intimidated the competitive posture, including survival, of many organizations who have found they cannot, at this time, respond to consumer expectations.
The existential crisis caused by the pandemic has forced organizations to refocus their innovation and restructuring efforts to ensure business continuity by building resilience and flexibility.
“Operations and supply chain groups need to develop new skills and quickly. Playing with a more balanced scorecard will require several changes: minimizing the carbon footprint, increasing supply chain resilience, creating more transparency and ensuring accountability,” says Bain & Co in a new report.
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Buyer-supplier relationships have changed
Blockchain technology, which allows for secure and controlled data exchange, can be important for data exchange.
Companies will need to reach out to their suppliers and build interactions and trust, but they also have the potential to use data-sharing-capable approaches to make progress,” the report reads.
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Supply chain resolutions are now standard
Bold organizations don’t wait around for supply lines to unravel: retailers with little storage space keep buying warehouses, shippers that don’t have a chance to discover containers keep making their own, and organizations that don’t have the ability to book with ocean carriers continue to charter ships, while those who remain dissatisfied with their online sales continue to buy e-business fulfillment operators.
Maersk and CMA CGM, by the way, appear to be on a collision course with Amazon and Alibaba in logistics, shipping and delivery.
They continue to use alternative ports, recycle products, switch to air travel, increase inland freight, take advantage of non-working time at the port, and divert resources from low-margin products to profitable ones.
GE and Stanley Tools are among organizations that have sought to ensure product safety through relocation of production, use of forward contracts, hiring of manufacturers, accelerated plant expansion, construction of new buildings, use of dual-source construction and closed contracts, or hard-source construction. 3D printed parts.
Inventory game has been broken
“Just-in-time is built to improve supply chain efficiency and economies of scale,” Nissan CEO Ashwani Gupta, Nissan COO, recently said.
To ensure they have enough to sell, retailers Nordstrom, PVH and Gap have tried «pack and hold» tactics: outrageous calls to avoid shortages with a bet they can keep unsold inventory and sell it as new the next day. year instead of making monumental discounts.
The Reuters report indicates that more organizations remain prepared to run aggressive constant replenishment programs and further automate their requests to avoid running out of sufficient inventory in the future.
Visit our blog Covid-19 impact on the supply chain after the pandemic to more info.
What is clear is that nearly 2 years after the planet learned of the existence of the coronavirus, the supply chain is still experiencing a series of unfortunate firsts: a historic degree of unreliability of carriers, rates record freight, lowest vacancies ever and more.
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