Pandemic spotlights critical gaps in supply chain
Early last spring, as the pandemic took hold, many of us masked up and ventured out to buy toilet paper only to find store shelves empty. While a minor inconvenience in the larger scheme of things, such shortages highlighted significant weaknesses in global supply chains—areas companies are now working to shore up as part of their ongoing digital transformations.
"Supply chains run the world," says Alexis Bateman, research scientist and director of sustainable supply chains at the MIT Center for Transportation and Logistics.
As Bateman points out, the pandemic not only increased awareness of what supply chains are and how they work, but more important, it showed how supply chains impact our everyday life and well-being. Now, she says, there is "clear recognition of what their role is going forward in terms of resilience and risk management."
In this episode of The Element, Bateman joins host Peggy Smedley and Mark Bakker, senior vice president and general manager of global operations at Hewlett Packard Enterprise, for a deep dive into the supply chain. They look at everything from the events and trends affecting supply chains today to the technology that will help create more dynamic, resilient supply chains for the future.
Not your average disruption
While supply chains often experience disruptions due to isolated, localized events such as natural disasters, the pandemic caused widespread disruptions throughout global supply chains, from technology to pharmaceuticals to consumer goods.
That not only heightened awareness of companies' and countries' supply chain dependencies and the need for more resiliency, but it also created a greater sense of urgency in an ongoing shift away from just-in-time manufacturing, driven in part by trade tensions and other pre-pandemic barriers, Bakker explains. Also in play is the so-called Amazon effect, where consumers now place an order and expect to get it within a day or two—an expectation that's carrying over into the commercial world, he says.
Given these events and trends, companies are now having more discussions about moving manufacturing closer to markets and building up more inventory rather than less, Bakker says.
Sustainability of supply chains
As supply chains shift and demand grows to move goods faster, companies are also faced with the question of sustainability, not only in terms of the environment but also social impact—a critical factor during the pandemic.
If people can't work "because they're ill or because they don't feel protected, then the way that our supply chains have operated for so long just aren't sustainable, in both the environmental and social way but also in the business continuity way," Bateman says. "So those definitions of sustainability and risk resilience are no longer separate definitions."
The role of technology
To address these issues, companies are accelerating digital transformation efforts, looking to modern technologies to build agility and resiliency into their supply chains. As Bakker notes, high-performance computing, artificial intelligence, machine learning, and other evolving technologies will help organizations automate more of their supply chains, making them more efficient.
Having a more holistic view of the supply chain will be critical going forward, adds Bateman. "Business leaders are increasingly recognizing the key changes they need to have in place so we never get back to this," she says.
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.