The ongoing economic and political climate is still impacting supply chain disruptions across the globe. Supply shortages, rising inflation, and massive layoffs in the job market are only expected to make the situation worse. In fact, as per KPMG, 6 out of 10 global enterprises expect the ongoing situation to continue to get worse for the next three years.
Supply chain leaders believe that despite the challenges ahead, today's organizations are better equipped to respond to disruptions as freight rates surged to 28 percent YoY in early 2022 but saw a decline of two percent in July of the same year, enterprises can expect costs to decrease as supply gradually stabilizes. They urge enterprise leaders to stay up-to-date on key supply chain agility strategies while mitigating disruptions' impact.
Here are a few ways that enterprises can swiftly navigate supply chain disruptions:
Depending on a single vendor or supplier for critical components can get risky. While a few suppliers might be equipped with the devices required by their partners but most are still struggling to deliver on their promise due to the ongoing disruptions. Hence, enterprises should partner with multiple suppliers to meet their needs. They should identify additional suppliers for the same components. This can help them to mitigate the impact of any disruptions in the supply chain industry.
Identify ways to tackle cybersecurity challenges
As the supply chain industry accelerates its digital transformation, sensitive data becomes more vulnerable to threats. In the past couple of years, the supply chain industry has been heavily targeted by threat actors, causing massive disruptions, with SolarWinds being the first to expose the vulnerability in today’s supply chain industry. According to the European Union Agency for Cybersecurity (ENISA), 58 percent of cybersecurity attacks on supply chains were targeted at suppliers with weaker infrastructure to gain access to the entire company’s network.
Therefore, in 2023, more enterprises will need to focus on their efforts on strengthening their data security. They need to invest heavily in upgrading and potentially revamping their cybersecurity to prevent threat actors from breaching their networks. Taking strict measures and following best security practices will enable enterprises to prevent and mitigate the impact of cyberattacks.
Prioritize customer centricity
Prioritizing customer experience will be key for many enterprises to navigate supply chain disruptions. As the business landscape becomes more complex and competitive, enterprises need to seek ways to enhance their customer service and differentiate themselves from their competitors.
Achieving this will require them to concentrate on customer-centricity, meaning they’ll need to collaborate with their customers to understand their requirements and provide the most effective and relevant personalized solutions. By partnering with their customers from the early stages of the supply chain process, enterprises can gain critical insights into customer behavior and preferences. This will allow them to build innovative solutions that help build trust and loyalty among their customer base.
Boost in safety storage
The pandemic has shown the devastating impact of not having enough safety stock which can lead to serious trouble. Inaccurate forecasting and constant fluctuation can lead to manufacturing and delivery disruptions that can lower customer service levels. Moving forward, supply chain leaders will need to work with multiple partners, especially financial leaders to identify the financial impact of larger safety stocks. While this means that more money will be spent on inventory, having a safe buffer will allow the enterprise to navigate the supply chain issues in the long run.
Increase use of automation
Supply chain leaders are recognizing the benefits of integrating automated systems into business operations. Not only do these technologies enable them to lower costs, streamline processes and increase efficiency but enable them to make informed decisions in real-time data. Many leaders have already adopted automation technologies, with 47%Chief Supply Chain Officer (CSCO) confirming that they have introduced automation technologies in the past two years. With sustainability on top of their agenda, many CSCOs confirmed that they can add predictability, flexibility, and intelligence to supply chain operations with the use of automation technologies.
Thrive with resilient supply chains
The persistent instability in the supply chain has prompted enterprises to recognize the need for effective supply chain strategies. The geopolitical conflicts, inflationary pressures, looming recession, and labor shortages are affecting the supply chain; hence businesses must prioritize supply chain resilience. Enterprises must invest in strategies that can improve supply chain flexibility, responsiveness, and risk management to mitigate disruptions and ensure business continuity during unexpected events.
The article has been written by Sushil Goyal, Co-Founder and COO, Rahi