Shifts in Supply Chain Strategies Due to Pandemic

Are you moving to create more visibility in your supply chain? Have you shifted suppliers away from China? Are you adopting new technologies?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. Materials, Handling and Logistics recently shared three fundamental shifts in supply chain strategies based on recent surveys due to the pandemic. We’ve summarized them for you below.

  1. A Push for Supply Chain Visibility and Transparency

Manufacturing executives are taking prudent steps to manage risk in their supply chains, with strengthening relationships and increasing transparency with suppliers and buyers as the top strategy identified by survey respondents. Per the surveys, 92% are taking at least some action to create more visibility within their supply chains, including requiring more information on suppliers’ own risk management and continuity strategies.

  1. Rethinking China

The Foley reports also analyze the extent to which COVID-19 has accelerated the movement of production and sourcing away from China. Of the survey respondents who have operated in the country, 59% have either already withdrawn operations, are in the process of doing so, or are considering it.

“Companies that previously diversified their international supply chains in response to the U.S.-China trade war were better positioned to mitigate the effects of the pandemic,” said Kate Wegrzyn, co-chair of Foley’s Coronavirus Task Force and the firm’s Supply Chain Team. “That said, companies may also benefit from retaining certain processes in China while relocating others in a strategic manner that disperses risks of disruption.”

According to the survey findings, the result of this analysis has increasingly led companies to move (or consider moving) supply chains closer to home: to the U.S. (74%), Mexico (47%), and/or Canada (24%).

  1. Technology and Supply Chain Innovation

The COVID-19 pandemic is also speeding up the adoption of new technologies and innovative business processes that improve supply chain efficiency and resilience.

The Accelerating Trends report identifies eight specific areas that are expected to see greater investments and provides guidance on how they stack up against each other in terms of resilience, cost, and maturity. In addition, survey respondents identified the top technologies they are considering as new tools or applications that improve supply chain visibility and tracking (47%) and operational analytics to better track business metrics and indicators (39%).

Overall, these are certainly transformative shifts from historical focus on low costs and lean inventory and will help supply chains become more resilient in the future.

Looking for more information on improving your supply chain management strategy? APICS Milwaukee has just launched new expert-led instructor classes for globally recognized supply chain certifications including: Certification Production and Inventory Management (CPIM), Certified Supply Chain Professional (CSCP), Certified Logistics, Transportation and Distribution (CLTD) and Demand Driven Planner Certification. Learn more…