Importance of Supply Chain Resiliency
If there’s one thing that the COVID-19 pandemic highlighted, it’s the deficiencies in supply chains globally. It’s simple when the pandemic resulted in national lockdowns, it immediately stopped the flow of raw materials and goods.
Because of this, manufacturers could not manufacture any goods. In turn, sellers had no goods to sell and consumers had no goods to buy which resulted in a loss of revenue. It’s not all bad news, though. Because it highlighted these deficiencies, companies could identify them easier. As a result, they could put the necessary strategies in place to make their supply chains more resilient.
But how did the COVID-19 pandemic impact supply chains and what are companies doing to make their supply chains more resilient?
How Has COVID Impacted Supply Chains?
As mentioned earlier, lockdowns severely slowed down or, in some cases, completely stopped the delivery of raw materials and goods. This, in turn, negatively affected many companies’ supply chains and production strategies.
In fact, according to a recent survey, 72% of companies reported negative effects in their supply chains as a result of the pandemic. Conversely, only 2% of companies indicated that they were fully prepared for the pandemic.
In addition, the negative effects of the pandemic had a knock-on effect for many companies. For instance, 47% of all companies reported that the pandemic led to workforce disruptions.
Considering the above, it’s easy to understand why supply chain resiliency is so important and why companies should have the necessary measures and strategies in place to keep their supply chains intact in the face of ongoing uncertainty.
What Are Companies Doing To Create Supply Chain Redundancy?
With that in mind, it’s time to consider what companies are doing to improve supply chain redundancy and make their supply chains more resilient.
In the first place, the biggest focus for many companies is making their supply chains more efficient. This will allow them to optimize the costs in their supply chain while implementing the necessary strategies to ensure resiliency.
Also, many companies will focus on increasing visibility across their supply chain operations. This is especially important considering that many companies will broaden, diversify, and segment their supply networks to ensure the supply of goods or materials even when the supply chain is constrained.
As a result, many companies are considering regional or local supply strategies and will place less reliance on imports from China and the East.
The Bottom Line
Although the COVID-19 pandemic highlighted the deficiencies in supply chains globally, it also showed companies the vulnerabilities and shortcomings in theirs. This, in turn, allowed them to implement the necessary strategies to ensure more efficient and resilient supply chains which will serve them well in the event of disruptions in the future.