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Biggest supply chain risks in 2020

Richard Tucker | 05. May 2020
5 minutes read

Companies caught flat-footed should learn a lesson from the COVID 19 crisis of 2020 and begin making fundamental changes now to prepare their supply chains for future shocks.

The current supply chain disruption is impacting consumer demand and it has caused delays and other frustrations in businesses’ global supply chains, highlighting how vulnerable the future could be to unexpected disruption.

Companies should gain as much visibility as they can into the details of their supply chain. Lack of visibility can frustrate a company’s ability to plan ahead and delay the decision-making process. On the flip side, better visibility can help risk management teams more effectively anticipate disruptions, plus of course delivery a greater customer journey.

To accomplish this, businesses should map out all of their current challenges in their supply chain. They should have short and long-term recommendations for supply chain resiliency to disruption. Also, build flexibility into the production process by identifying these weak points in the chain and ensuring alternate suppliers are available at all times.

Disaster Recovery plans are going to be an essential part of Supply Chain planning risk mitigation for today and the future.


Top 5 Supply Chain Planning Recommendations for today and the future


1: Take care of your people first.

Then customers, suppliers and shareholders. As we all feel the effects of supply chain disruption, it’s important to remember that your people are your greatest resource. Proactively communicate with critical suppliers to determine inventory levels and potential issues in the short and long term.

Remember to look after your customers, under promise with a realistic expectation, and over-achieve – without customers you won’t have a business to worry about!


2: Activate a global supply chain “task team.”

If one doesn’t exist, assemble a cross-functional task team to respond to current disruption and transform it to a task centre for the future. The goal of the task team is to actively seek real-time information and feed it into an agile response planning and execution process. They could be multiple “sub-task teams” that have been created to respond to key disruptions.

Monitor supply disruptions in the short term and reprioritise available supply and inventory accordingly. Run multiple, real-time fact-based scenarios to “stress test” the supply chain and better understand how daily demand fluctuations will affect your suppliers, customers and revenue at risk.


3: Scenario plan your supply chain impact for the short, middle and long term.

For the immediate future especially, actively seek real-time demand and supply information, including inventory positions. On a daily basis, or more frequently if information warrants it, reassess allocation of available inventory and future supply to customer orders, to maximise order fulfilment and minimise revenue at risk.


4: Harness the entire ecosystem in a response action plan.

Increase end-to-end supply chain visibility and sharing of information, harnessing your partners’ data sources in all directions. To minimise latency of information from suppliers, manufacturers, DCs, freight partners and 3PLs, try using shared environments such as common documents, to determine the best course of action.

Collaborate to execute a digital supply chain plan, ensuring data integrity and security to find ways of decreasing risk exposure and to solve challenges across all parties to restore the global supply chain balance.


digital logistics


5: Prepare for the ‘new normal’.

When it comes to modern day global supply chains, there’s no such thing as “business as usual”. The full impact of the current situation might not be realized for some months. As you plan your recovery, begin to build your competency in navigating through future uncertainty.

The global Retail industry is experiencing changes in consumer behaviour due to these Supply Chain risks and is creating a ‘New Normal’

As a result of the supply chain disruption the consumer demand shifting to e-commerce channels purely out of necessity.

Retailers cannot expect that after this crisis consumer behaviour will be restored. While shoppers will still visit traditional brick-and-mortar stores, we expect that many consumers will stay online as a matter of convenience. In addition, many shoppers will remember and value which retailers and consumer goods companies met their needs and formed a personal relationship during these times, influencing long-term loyalty.

For many organisations, this “new normal” will require market leading technology and continuous innovation to deliver a customer promise.

Final words

These are difficult times for everyone working in the supply chain, you don’t need to wait for the next disaster to take action in planning to understand the risks on your end-to-end supply chain – today, tomorrow and long into the future.

So, what are the Biggest Supply Chain Risks in 2020? As long as you have your Supply Chain in order and your planning in place, it’s the “new normal’!

  1. Are you prepared for the ‘new normal’?
  2. Can your company prepare for a gradual return from lockdown?
  3. How will your customers react?

Timing is unknown and could cause an unusual demand on your Supply Chain. Could it be a summer season, autumn season, will we see the same Christmas peak? The reminder of 2020 will be a very difficult year to forecast and plan.

Do you think your Supply Chain is ready for the remaining of 2020? 

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