Global Supply Chain is the backbone for every nation’s growth as it is a sum of all the processes & operations from procurement of raw materials, through the manufacturing & ends at the sale, transport & distribution of these products. Hence, making the very system more robust, resilient & integrated is the need of the present times. With COVID-19 treat not completely eliminated & the possibility of recurrence of such scenario has presented a new set of challenges & opportunity in front of supply chains businesses worldwide.
Changing cross-border laws, trade rules & regulations, raising shipping rates & reduced container availability is the core reason behind the need to make the Global Supply chain smarter & more dynamic in operations to ensure growth & profitability.
Challenges brought forward by COVID-19 in SCM Ecosystem?
Pandemic changed the whole scenario & forced businesses to re-evaluate their strategies and operational models as dynamics of operations & activities & with them came newer challenges, like,
- Production Reduced: Manufacturing hubs were shut down during the end of 1st quarter of 2020 & they gradually opened afterwards. Even now due to reduced manpower many of these units are operating at low capacity and hence, result in lower productivity.
- Demand Variation: The changes in habits, lifestyle & living standards that occurred due to COVID-19 lead situation has caused a considerable variation in the demand. Sectors like air travel, luxury, reduced & for product related healthcare, medicine, personal care, online entertainment (OTT), etc surged.
- Container Crises: The pandemic made a severe impact on the global supply chain. India alone faced a manpower crunch in 2020. In addition to this, the rapid increase in demand for EXIM from US & European countries, resulted in massive container shortages crisis, port congestion across the globe, disorienting shipping schedules and skyrocketing freight charges. It is expected that these challenges would impact the global supply chain up till Q1 2021 or may be after that as well.
Challenges presented by Covid-19 have pushed businesses to think about solutions that are more effective & resilient, some of these solutions can even be heavy in investment of effort & money.
- Risk Assessment with Data Analytics: Recent times have shown that there are many hidden vulnerabilities in the Global Supply Chain System across industries that can have severe impacts on growth. This leads to the understanding that in-depth risk assessment is very crucial to identify & solve all such hidden blind spots.
- Making the System Resilient: Pandemic brought about many challenges that should be looked into but one of the most important is to make the system more resilient by adopting digital softwares, building transparency among partners & stakeholders & more.
Adopting Digital Transformation
A report by PricewaterhouseCoopers suggests that a company can gain upto 25% revenue growth when investing in digital transformation.
- Track & Trace: Use of digital platforms equipped with Real Time Shipment Tracking, Container Tracking, GPS (global positioning system) and RFID (radio frequency identification) to improve visibility & transparency of the supply chain system. Also, the introduction of Mobile Apps for Tracking Shipment has raised the level of accessibility.
- Rate Procurement Platform: Use of digital platforms for raising RFQs gives an easy & smart one-click system for sending RFQ plans to various vendors for the bidding process. These Platforms have reference rates to guide with market trends. You can conduct multiple rounds with dynamic deadlines to ensure a competitive & transparent bidding process. One can create new shipment inquiries across Full Container Load and Part Container Load in less than a minute. These platforms also help to get instant quotes with the power to negotiate even further. The platform also provides chat support. This improves connectivity between stakeholders, enables rapid responses, improves efficiency, lowers cost and increases the profit margins