Importance of Supply Chain Resilience

1. Importance of Supply Chain Resilience For as long as supply chains have been, risk management has been a challenge. Because of the interconnectivity of all its links, even a little problem in one isolated place might imperil the whole global supply chain. As a result, when important global trends and events occur, there is a huge risk of broad supply chain disruption. Global supply chain disruptions and dangers have reached an all-time high. The COVID-19 pandemic is the most significant of them. The Institute for Supply Management revealed that 95% of enterprises encountered operational challenges as a result of the pandemic in a 2020 poll. As a result, corporate leaders all over the world think that in order to be more robust and competitive in today’s market, they must modernize and significantly alter their supply chain strategy.

2. Other recent issues that have had a substantial influence on traditional supply chain procedures are the rapid shift in consumer behavior and an extremely volatile trade and political climate. E-commerce expenditure has tripled in the last 10 years, and internet purchasing has climbed by 149% in 2020 compared to the previous year. Customer desire for speedier delivery and more personalized buying experiences has increased as e-commerce has grown. The Amazon Effect is the increased expectation of same-day delivery and its impact on businesses and logistical networks. To be able to respond to these expanding demands, supply chain managers have had to make rapid and significant changes to their logistics and storage networks, as well as find new methods to engage with third- party fulfilment partners. Even before the implementation of COVID-19, American firms sought to lessen their reliance on foreign manufacturers and suppliers. By 2019, foreign tariffs and trade regulations had become more volatile, and firms were looking for technology solutions to make supply chains more self-sufficient and robust. As a result, integrating digital transformation and Industry 4.0 technologies into supply chain operations is swiftly becoming a major priority for worldwide executives. What is the Process of Supply Chain Resilience? Effective supply chain management requires a flexible contingency plan and the capacity to respond quickly to operational disturbances. To be really resilient, a supply chain must be able to

3. forecast and anticipate problems, and in many circumstances, completely prevent them. Strategic supply chain planning is a crucial step toward resilience because it synchronizes all supply chain components while increasing visibility and agility. Because of supply chain planning, supply and demands are better recognised, and production is more coordinated. This comprehensive, forward-thinking strategy helps firms anticipate difficulties, mitigate the effect of supply chain interruptions, and improve overall operations. When a company has the digital technologies in place to monitor and interpret Big Data, it greatly enhances supply chain resilience. Systems powered by artificial intelligence can curate diverse data sets from across the enterprise and the world. News, competition activity, sales information, and even consumer comments may be studied together to uncover patterns and possibilities. To reduce operational and logistical complexity, supply chain managers have typically worked to limit the number of partners and suppliers in their network. The stability of the social, environmental, and political systems underpins this strategy. Unexpected outages in one location might cause network operations to delay or even cease across the board. Blockchain, sensors, and advanced analytics, for example, enable supply chain managers to monitor complicated relationships and supplier contracts even in the most remote areas of their network.

4. Profitability in the supply chain has always hinged on avoiding excess and maintaining as lean stocks as feasible. Capacity and inventory buffers are costly, and supply chain managers have frequently wagered against interruptions in order to keep costs low. When the epidemic hit, many companies understood the true cost of their risk. To be resilient, supply chain operations might include on- demand manufacturing, virtual inventories, and predictive demand forecasting employing digital supply chain technology. Benefits of a Resilient Supply Chain In an increasingly competitive market, finding a good balance between supply and demand is a critical concern for every supply chain management. Many organizations that have reduced their spending on diversity, supply chain technology, and other resilience measures have just learned the actual cost of their decisions. Diversification, supply chain technologies, and other resilience measures, on the other hand, can result in a range of corporate benefits, including: More efficient operations: Better resilience frequently leads in lower risk and a greater ability to invest in innovation and growth. According to a 2020 global business analysis done by Bain and Company, companies that emphasized supply chain resilience had up to 60% shorter product development cycles and were able to expand production capacity by up to 25%. Increased productivity: Resilient supply chain solutions boost overall system productivity. According to a McKinsey 2020 poll,

5. supply chain leaders worldwide report enhanced productivity as a result of robust supply chain systems, and 93 percent expect to prioritize resilient supply chain strategies for investment in the coming year. Risk reduction: In many firms, supply chain operations are the most exposed to risk and loss. By definition, supply networks are geographically dispersed and functionally complex. As a result, supply networks are especially sensitive to disruption. Resilient supply chain technology reduce risk by offering visibility into all network activities and allowing businesses to optimize and change procedures and logistics in real time. Technologies for an Agile Supply Chain Artificial intelligence (AI): AI-powered supply chain solutions may provide deep procedural and operational insights by collecting and analyzing data from several sources. Predictive analytics and Big Data analysis may help companies estimate risk and demand and offer measures and remedies. Machine learning: Machine learning allows for the detection of trends in supply chain data as well as the identification of these key components — all while continually learning. This helps supply chain managers to respond quickly with the best processes and operational strategies. Industrial Internet of Things (IIoT): In a supply chain, the IIoT network consists of linked devices and items with sensors and

6. unique IDs that allow them to broadcast and receive digital data. They gather data and interact with the central system. AI can evaluate and comprehend this data in order to make rapid judgments and intelligently automate supply chain processes and procedures. Additive (3D) printing: Smart factories can swiftly reprogram 3D printers to make unique goods on-demand without disturbing ongoing company operations. Supply networks can defend themselves against interruption by having access to possible virtual inventories. Robots and autonomous things: Intelligently automated robots and drones for speed, efficiency, and precision can modify their operations on the go to suit rapidly changing requirements. They also lessen the risk of injury by relieving human employees of extremely repetitive or risky jobs. Modern databases: Big Data, advanced analytics, and real-time insights from modern databases are used to power robust supply chain systems. When outfitted with a contemporary ERP system and an in-memory database, supply chain technology may be modified to run quicker and more reliably. Resilience entails more than simply surviving an interruption in activities. A completely resilient supply chain and business endure and exploit adversity to develop and enhance their operations. Building a robust supply chain is critical in our contemporary day since disruptions like as pandemics, wars, climate change, and so on

7. are common. A robust supply chain enables firms to thrive even in difficult times.