A pandemic outbreak can severely affect global supply chain management, from reskilling workers to changes in cost structure and working capital profile. Read on for tips on effectively preparing for a pandemic and improving supply chain management.
Reskilling Supply Chain Workers
Reskilling supply chain workers has become a global issue. According to the World Economic Forum, over half of the world’s workforce will need to be retrained over the next five years.
The pace of change is accelerating as a result of automation and digitization. Job complexity is increasing as a result. Additionally, as a result of new technology, skill gaps are expanding.
One way to address this issue is by combining career development support and reskilling initiatives. These two strategies are already being used by some leading countries. For example, the Impulse Qualification Network, a national grant managed by the Austrian Public Employment Service and the Federal State, has been designed to help companies identify their skills needs and design training plans.
Investing in human capital and a sustainable supply chain can turn disruptions into opportunities. A high-performing supply chain is now viewed as a necessity to compete.
Companies will need to focus on four key areas to reskill supply chain workers. They include visibility, agility, efficiency, and resilience. Supply chain management is a global, regional, and national phenomenon. Without it, the economy and industry would come to a grinding halt. The success of supply chain management in a global economy affects many aspects of our daily lives. There need to be more supply chain managers to meet demand. You might be well-positioned to close the talent gap if you have a degree in business and supply chain management which can be taken online. An online bachelor degree supply chain management provides a plethora of opportunities for guest lecturers by allowing global business titans to virtually join lectures and share their knowledge.
Identifying Hidden Vulnerabilities in the Global Supply Chain
In a time of rapid change and uncertainty, the United States and many other nations have become concerned with the vulnerabilities of the global supply chain. A pandemic, a climate crisis, a trade war, and natural disasters have sparked new debates on the value of international production and supply chains.
Many companies have started implementing measures to mitigate risks, including diversifying their suppliers. However, most manufacturers still need a complete picture of their supply networks.
Organizations must take a fresh look at the existing structures to identify the best practices for making their supply chains more resilient. This includes mapping out transportation hubs, distributors, and suppliers. Once they have this information, they can begin planning for potential disruption.
Another good idea is to stockpile critical supplies. Companies should also communicate with their existing suppliers about their plans for an outbreak.
There are also several ways to measure the effectiveness of a particular solution. A survey conducted by the U.S. government has identified three metrics for measuring the impact of different strategies. These metrics include how long it takes a supplier to respond to a disruption, how much the supplier’s revenues are impacted, and how long the supplier can recover from a disturbance.
Preparing For The Rollout of COVID-19
Global supply chains are sophisticated networks of transportation and manufacturing firms that move products throughout the world. The COVID-19 pandemic highlights the fragility of these systems.
As the pandemic continues to impact the global economy, businesses are working to prepare their supply chains for the aftermath. In a recent survey conducted by Ernst & Young LLP, 200 senior-level supply chain executives were surveyed to examine the potential impact of the pandemic on their supply chains.
The study revealed that nearly half of the executives expect to experience some form of disruption. This includes unplanned shutdowns of suppliers. Other executives also reported needing to rely more on single-source suppliers.
Companies are making an effort to re-evaluate their JIT production model. While this strategy minimizes inventory costs, it can make companies more vulnerable to disruptions.
Another problem facing manufacturers is the need for more transparency within their supply chains. As the vaccine rollout progresses, there is a growing need for more reliable communication channels and data sharing between upstream and downstream entities.
Cost Structure And Working Capital Profile
When a novel coronavirus pandemic hit the world almost two years ago, supply chains around the globe faced various challenges. The disruptions made it clear that companies must invest in resilience and real-time visibility.
Organizations must focus on improving the overall ecosystem to maintain high performance and become more resilient. They need to identify their critical components, re-evaluate their Business Continuity Plans (BCPs) and take action to improve robustness.
While the first significant challenge in supply chain management is the scarcity of labor, the second is the scarcity of materials. These are both affected by numerous factors. These include artificial scarcity due to hoarding, panic buying, and a nationwide lockdown.
To ensure consistency in the supply of critical raw materials, firms must work towards increasing their alternative sourcing sources. Investing in reserve capacity and investing in local vendors can help.
Another critical aspect of the supply chain is the uncertainty of demand. Pandemics like COVID-19 can cause a rapid increase in the market for certain goods. This increase can result in excess production, rework, and a longer delay in delivery.