The unprecedented disruption caused by the COVID-19 pandemic has changed the way global supply chains operate. Unlike other major disruptions, such as natural disasters, this pandemic has affected both supply and demand.
At the same time, COVID-19 is also just merely exposing problems with supply chains that have already existed. Many manufacturers have realized that small suppliers that are higher in the supply chain can be disconnected (not integrated) from downstream producers. Also, many organizations have vital systems that are outdated and do not take advantage of the latest technologies like machine learning.
Many organizations rely on an internal model where information is collected at a central point from where other teams can access it. But supply chains are not just one single enterprise. They are complex networks of many organizations working to achieve a goal.
The goal is to create a system in which data can flow seamlessly between these organizations. To achieve this goal, an integrated cloud-based solution for supply chains that provides connectivity between global organizations should be put into place.
In an integrated supply chain, organizations can act proactively throughout the supply chain to avoid breakdowns and improve overall efficiency. An integrated supply chain enables predictive insights, rather than reacting, which allows organizations to anticipate and plan for what is coming within their supply chain. Real-time networks and predictive planning can allow insightful action enabling every part of the supply chain to respond efficiently and effectively.
Let’s review a real-world scenario. Say there was an adequate amount of toilet paper in a warehouse, but stores suddenly started placing larger orders than usual because of an unforeseen demand. By the time those orders make their way back to small suppliers, the size and duration of the demand are often vastly exaggerated.
What happens then is the bullwhip effect due to communication bottlenecks. This causes shelves to sit empty when demand is high, and then be oversupplied once the crisis has passed. In this case, if an integrated supply chain was put into place, it could have identified the need for more well-timed shipments to the warehouse, while not demanding that small suppliers ramp up production for an unnecessary oversupply months later.
Integrated supply chains are already possible and can greatly reduce the impact of global supply and demand gaps that organizations are currently facing. Even though the current pandemic has had a devastating impact on both global health and financial wellbeing, we’ve also seen it accelerate progress that has been difficult to enact during the “old normal.” Organizations that have relied on supply chains with limited reach and outdated technologies can be fearful of the investment of time and money required for the shift to a modern system. But these systems are not untested or experimental and real-world cases show how supply chains can operate efficiently and swiftly during a crisis.
Organizations everywhere are feeling the impact of this pandemic, but here at Vanguard, we thrive on the challenge of keeping up with demand, especially in situations like these, which pushes us to improve our Integrated Business Planning platform to ensure our clients are best equipped to respond with their best business decisions moving forward.
Modern technology is enabling the move to autonomous supply chains. This is because an effective networked system can allow artificial intelligence and machine learning to provide predictive planning insights, allowing supply chain planners to be proactive in a crisis rather than reactive. Smart supply chains can accurately predict the impact a pandemic could have on essential items before shortages occur, staving off panic buying. Or the technology can predict the impact on small businesses, enabling supply chain planners to proactively spread the impact across the organization’s supply inputs and averting a boom-and-bust cycle.
Resiliency in a supply chain is enabled by an organization’s ability to plan, execute, and sense changes in as real-time as possible. These capabilities allow organizations to take bold actions to effectively navigate through the current pandemic and future disruptions. The technology exists to build globally networked supply chains that are resilient and adaptive, but not all infrastructures are created equally. Vanguard’s Mesh Network is designed for maximum speed, fail-safe performance, and improved customer experience, enabling business users worldwide to collaborate in real-time.