2022 — The wake-up call for supply chain planning enthusiasts
The majority of the corporations refused to learn any lesson from the natural disasters of the last decade. As a result, most of them took a hit in their supply chain planning when a global pandemic happened in 2020. COVID-19 should serve as a wake-up call for all supply chain planning enthusiasts, and they need to implement some significant changes in their supply planning to avoid future issues.
To avoid such disasters from happening again, they need to conduct in-depth mapping of their supply chains, identify alternate item sources, change the assessment method of their procurement function to include cost savings as well as revenue assurance, and include disruption-related metrics in their supplier evaluation. Imarticus has come up with a Certification in Supply Chain Management in collaboration with DoMS and E-learning Centre, IIT Roorkee, to provide supply chain certification online for all young professionals.
This article will help all supply chain planning enthusiasts to understand how to alter their planning in 2022 to avoid future disruptions in their supply chain.
How most companies reacted to the pandemic
Most companies had their procurement teams struggling to cope with the global pandemic. On the other hand, the companies attempted to follow the response measures, diligently operated to secure raw materials and other necessary components, and protect their supply lines. However, their global teams struggled to access critical information that was unavailable most of the time. As a result, the impact of the pandemic hit most of the companies in full force as their response to the crisis was uncoordinated and reactive.
In contrast, a small minority of the corporations had already invested in mapping their supply chain network before the pandemic hit the world. As a result, they were better prepared to tackle the crisis. The structure of their supply chains was better visible to them, and they did not need for last-minute scrambling to gather the information they already possessed. They had data to assess the specific sites, products, suppliers, and parts at risk and swiftly arranged for constrained inventory and capacity at alternate locations.
Major problems in the supply chain planning
The global pandemic has helped us to identify the major problems in our supply chain planning that need to be corrected. It is up to the companies whether they will be able to identify and rectify them and prepare for future natural disasters or crises. Some of the major problems that most companies faced in their supply chain management during the global outbreak of COVID-19 were:
- Most companies lacked supply network mapping as a risk-mitigation strategy because of its high expense and labor requirement.
- A majority of the companies centered their procurement activities around cost savings instead of ensuring guaranteed revenue.
- While writing contracts for suppliers, most companies ignored the need to include annual supply chain mapping and strategy to recover during crisis periods.