Building a more resilient supply chain through sustainable solutions

Transportation and distribution of goods have been heavily disrupted due to pandemic situations as the supply chain is interdependent between things being manufactured in one place and consumed in another. The post-pandemic situation saw a plunge in demands in most sectors as economic activities decreased. Wrong demand forecasting resulted in reduced supply activities. On the other hand, the global COVID-19 situation froze supply chain operations world wide due to shutting down of factories and labor shortages, slowing down the pace to a near standstill, causing massive backlogs. Worldwide supply chain shortage due to dysfunctional operations management came as a by-product of the situation.

The immense volume of data generated by various systems, devices and communication has mostly been poorly managed, analyzed or utilized by the existing infrastructure of the supply chain. As a result, the supply chain today is more demand-driven instead of being data-driven or forecast-driven. Key decisions are mostly drawn from the events that happen. Perception-driven forecasting of demand resulted in an overwhelming number of demands left unfulfilled due to lack of supply. The ever-growing need for an effective, centralized data analytics powered by AI and ML is barely fulfilled. The current supply chain systems lack the agility and flexibility to solve these problems.

One of the biggest challenges for today’s supply chain is that companies lack transparency as to their storages, surplus and demand. Keeping extra raw materials comes at a cost but when it comes to risk management during low-probable high-impact disruptive events, shared information could be a key to handle the crisis. The post-pandemic microprocessor crisis is one example of lack of transparency. In today’s world, the supply chain is depended on not just a relevant supplier, the entire Supply Web is interdependent. We need more accurate and updated maps of key inputs and where they come from in any given industry.

Manual, labor-intensive, operational structures of the fulfillment facilities in classic supply chain systems are highly inadequate to meet the needs of the growing demands of today’s industries. Introduction of automation through robotics has already been introduced by some of the leading fulfillment giants, but due to astronomical pricing and unavailability of the technology, businesses are not being able to utilize the technology. As a result, businesses are capitalizing on human labor rather than technology, which is apparently not a sustainable model.