The outbreak of the coronavirus has provided companies with a new way of thinking about the future of supply chains. With the failure of traditional methods and forecast, it has been well established that going forward, Supply chain planning will undergo a fundamental change. Supply chain leaders will explore new ways and technologies to make their supply chain withstand any future storms. In the feature, we bring forward the key forces of change in reshaping business model and manage the supply chain of the future.
With nations just starting to reopen up their economies across the globe, supply chains have undergone major disruptions failing all the predictions and forecasts. As they fight back the pandemic and get back on their feet, it has been learned that a more efficient way of planning is the need of the hour. Transformation in Supply chain planning has to be embraced as an important part of any organisation’s digital transformation roadmap.
As the cloudy journey comes to a near end and people move towards the new normal it is known that a few forces will drive the change in the ever-evolving supply chains in the near future. A BSR research identifies the four key forces of change likely to have a significant impact on supply chains from today to 2025.
Widespread Adoption Of Technology Across The Value Chain
Technological advances are already changing the way supply chains are managed from how products and services are made to how they are delivered. Companies are continuously bringing in digital transformations from blockchains, machine learnings to augmented reality.
Maninder Bagga, Business Development Head, Fretron Pvt Ltd believes, “With the ever-increasing need for transparency and efficiency in the supply chain domain, now is the time where all the manually driven processes are digitised and bottoms-up approach is adopted. Right from ground level labourers to executives, all the processes need to be digitised and bottlenecks are to be identified and eliminated.”
While companies are already following the roadmap of digital transformations, the pandemic further pushes them towards its faster adoption. Sandeep Chatterjee, Associate Director, Deloitte who shares the same point explains, “Supply chain planning will be driven a lot by data
analytics. There will be more machine interaction rather than human intervention. However, we will still need human intervention as machines cannot have a gut feeling as supply chain planning is both a science and art.”
Human Migration On A Large Scale
The outbreak of the pandemic exposed the vulnerabilities of many organisations. The scare of the pandemic along with loss of job led to the
migration of many, which changed the labour dynamics in the nation and brought the supply chain operations to a near halt.
Jayaraman Krishnamurthy, Head, Industry Solutions and Sales, o9 solutions shares, “In the last few months, we have also seen reverse
migration happening from cities to villages which have created labour shortages for companies, making it difficult to fulfil demand”.
Speaking on the same, Mr Chatterjee explains that the void created due to migrant workers moving to their hometowns will make companies look at a bare minimum permanent labour force followed by a temporary workforce for spikes. The challenge of lack of labour which was least expected in a densely populated nation like India made everyone realise the importance of human intervention along with the immediate need for automation.
Mr Bagga said, “There is an immediate need of automation for all the human-intensive operations and while this paradigm shift takes place companies need to consolidate and focus on ensuring that they keep on milking their cash cows (most profit-yielding established products) to prepare themselves for the automation transformation within the supply
Mixed Signals On Trade And Transparency
COVID-19 has accelerated the pre-existing trends in the supply chain. While pointing out the most significant one, Mr Krishnamurthy said,“The most
significant ones include companies mitigating risks by finding alternate suppliers outside the usual supplier networks concentrated in a specific geography.”
While it ensures that the production/demand is not impacted and the customer does not suffer; on the other hand, the companies also need to
ensure that there is no excess inventory and have a check on inventory costs as well.
This is an abridged version of the original story that appeared in the September issue of the Logistics Insider magazine. Click here to read the complete and unedited story.
LOGISTICS INSIDER Magazine SEPTEMBER Issue 2020
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‘The Future is Multimodal’ is the title of the September issue’s Cover Story. The Cover Story deep dive on the potential multimodal logistics and the transformation it can bring in India’s supply chains.
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