The supply chain has evolved into a highly sophisticated tool that is vital to the nature of competition for many companies. However, their interconnectedness and globalization makes them increasingly vulnerable by introducing a wide range of new and unfamiliar risks. With growing potential points of failure and a smaller window for error to absorb disruption, COVID-19 has reminded many companies that they are not immune from high-risk threats.
The good news is that new supply chain technologies are emerging that show promise to dramatically improve visibility and transparency across the entire value chain to enhance the agility and resilience of operations without the traditional overhead.
Advances in communication and information technology are making the evolution of the supply chain possible. IoT, 5G, AI, 3D printing, and cloud computing are essential components to build the digital supply network of the future. The current volatile business landscape is creating an imperative for a new supply chain model. Whether it is a black swan event such as COVID-19, a trade war, or a supplier’s bankruptcy, companies are forced to learn how to count on the uncertain and unexpected.
Creating a digital supply network depends on the industry sector and it will vary between companies. The network will not be successful if it is strategically aligned with the business strategy. Risk management will be an integral element of design. The goal is to build an agile supply chain that seeks to mitigate risk and is equally prepared to abruptly adapt to disruption and recover from any unanticipated supply chain disruptions.
Whether it’s closed borders, a diminished workforce, or tariffs, the impact of inefficiency is being felt across the board in all industries. Innovative, next-gen technologies that once sat on the back burner are now priority tasks. Once the high-threat risks subside and business returns to normalcy, the virus outbreak may have helped to push these technologies into the mainstream. Companies that are able to embrace innovation and technology during this unprecedented time in an effort to offset risks and losses and evolve to meet demand will be even more prepared for the next black swan event.