Founder/CEO of Mercado labsRobert has 25 years of experience in engineering solutions that improve end-to-end efficiency in the supply chain.
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The world of global trade is currently facing unprecedented challenges, severely disrupting supply chains worldwide. From the global pandemic to trade wars and natural disasters, the complexities and uncertainties of an entire industry have been laid bare. In this environment, ensuring supply chain resilience has become critical to the future of global trade, yet many companies continue to miss the mark.
While the desire to build more flexible, robust and flexible supply chains that can withstand shocks and disruptions has never been more evident, Gartner recently reported on how many companies remain stuck in outdated models and tied to poorly equipped systems and tools that prevent them from achieving true resilience.
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Identification of existing supply chain challenges
Despite the havoc global supply chains have wreaked during the pandemic, I believe we have also learned some valuable and even crucial life lessons regarding the world of global trade. For example, there are several areas where the industry is and continues to struggle.
• Pre-existing vulnerabilities
Even before the global challenges of the pandemic, supply chains suffered from problems like a over-dependence on the production facilities of a single country. The factory closurestransportation delays, border closures and labor shortages that occurred during this period of uncertainty only emphasized the already existing need to develop better end-to-end resilience.
• Stagnant operations and slow changes
As the Gartner study found, many companies are still lagging behind in adopting the right digital tools and technologies. This lack of innovation can hamper their ability to respond quickly to unforeseen disruptions, amplifying vulnerabilities. Digitization offers many benefits, from improving supply chain visibility and agility to enabling real-time collaboration and communication with suppliers, customers, and logistics and automation between upstream and downstream operations.
• Poor investment and innovation
Investing in building supply chain resilience has been challenging for many importers, often with cost pressures and competing priorities. Many have relied on outdated and poorly effective tools ill-equipped to handle the complexities and risks of modern supply chains. Underinvestment in supply chain resilience can have serious consequenceswith many companies experiencing quality issues, lost sales, severe product delivery delays, increased transportation costs, reduced supplier capacity, and increased compliance risks.
Winning strategies shift business priorities
Based on my experience in the supply chain industry, I believe the answer to achieving end-to-end resilience and avoiding falling prey to ineffective “resilience-washing” solutions lies in applying a number of fundamental changes in importing. Businesses absolutely need a better understanding of what happens to their products throughout the lifecycle, from planning and purchasing to production, relocation and sales.
This still requires organizations to accept the need for a paradigm shift away from a focus on accuracy through accurate forecasting and towards better management of uncertainty in their supply chains. There are three steps to this resilient supply chain solution: digitization, networking, and automation.
Digitization
This step includes investing in the right technology solutions that track products and inventory levels in real time, optimize operations, shorten lead times and enable rapid response times to unexpected events. I think we can do this by digitizing the Rosetta stone of the input: the order.
By tracking and managing order data in real time, importers can track the availability of their products at every step of the process, connect their networks and automate processes to maximize the likelihood of products arriving on time and in full. By embracing digitization, importers can build flexible, flexible and responsive supply chains that can quickly adapt to unexpected events and disruptions. Leaders must digitize their operations for real-time tracking, partner with suppliers for contingency planning and proactive communication, and implement a continuous improvement program for waste reduction, quality improvement, and flexibility.
You can also use data analytics and artificial intelligence to gain deeper insight into supply chain performance, identify risks and optimize your operations. This includes:
• Use predictive analytics to predict demand and optimize inventory levels.
• Using AI powered platforms to identify bottlenecks or disruptions.
• Analyze transportation routes to identify potential delays or congestion.
• Monitor supplier performance metrics to identify areas for improvement.
• Make data-driven decisions when selecting or working with suppliers.
Networking
Leaders can create greater connectivity between both internal and external teams – focusing on real-time, accurate and validated data – to build partnerships based on trust and transparency. This can be achieved by:
• Promoting a culture of trust and transparency between all parties.
• Implement supply chain visibility solutions to increase transparency and collaboration with suppliers and partners.
• Communicate regularly both inside and outside the organization to share information about demand forecasts, production plans and inventory levels.
• Use collaboration tools to streamline communication and facilitate knowledge sharing.
• Provide training and development opportunities to build stronger networks and increase knowledge sharing.
Automation
Improve accuracy by managing workflows and generating mission-critical documentation. Digitizing orders enables supply chain leaders to automate the standardization of workflows and processes, leveraging cloud-based systems to generate important documentation such as packing lists and validated invoices. Workflow automation can simplify and standardize routine tasks and approvals, reducing the risk of errors caused by manual processes.
By investing in the right technology solutions, creating more connectivity between teams and automating workflows, importers can adapt and prepare for future unforeseen challenges in the global trade sector.
I believe that change is not only good, but also necessary. We’re starting to see it happen more with brands that are at the forefront of innovation, like Zarawith its flexible business model during the lockdown, and H&M, which was able to keep up impressive finances despite closing some stores during the pandemic. That’s why I believe preparing for unforeseen storms depends on what companies do now to prepare.
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