How Are Supply Chains Adapting to the New Reality?
While supply chains are generally quite flexible, no one was prepared for this pandemic.
Supply chain as a business function is under a very large spotlight these days as it’s the network that is connecting necessary supplies, medical and other essential supplies, to organizations that are responding to needs arising from COVID-19.
While supply chains are generally quite flexible, no one was prepared for this pandemic. In a March 10 survey by the Institute for Supply Management, almost 75% of companies reported supply disruption and 44% of the companies didn’t have a plan to deal with this kind of disruption.
Peter Fretty, IndustryWeek technology editor, asked some experts for an analysis of how to handle this unique situation.
Nigel Stacey, managing director and global lead of Accenture Industry X.0
Q: How can technology enable supply chains to be agile during this pandemic?
A: “The COVID-19 global crisis places extra significance on investments in technology and digital that will help build resilient supply chains, elastic workplaces and resilient IT systems.
Some companies are meeting unprecedented demand and are hard-pressed to maintain the required flow of products and materials. And every business now has a responsibility to protect the health and welfare of its employees, supply chain ecosystems, and the wider communities it operates in. This shows how industrial companies need to build sufficient flexibility into their supply chains to protect against current and future disruptions. For that, they need to prioritize investments in applied analytics, artificial intelligence and machine learning, while also ensuring full transparency across the supply chain.
At the same time, industrial companies must enable virtual work whenever possible to protect their people while ensuring the highest levels of productivity. For production, this means moving to automated, remote-controlled and data science augmented production, and also enabling the digital worker. For support functions, companies should implement no-touch business services using intelligent automation, robotic process automation and user experience design. They will also need to invest in building a human+machine workforce that makes transactional processes more digital.
These changes will stress existing IT infrastructure and systems to the limit, making investments in building resilient systems an investment priority. Systems resilience describes a system’s ability to operate during a significant disruption or crisis, with minimal impact on critical business and operational processes. This means preventing outages, mitigating their impact, or recovering from them. Steps to build more resilience into systems include, for example, investing in automation, cloud optimization, limiting performance constraints and cybersecurity.
Companies who develop target-oriented action plans now to tackle these challenges – and who execute them when indicators show the time is right – will be revived, revitalized and ready to compete in a post-COVID-19 world.”
Jonathan Wright, Global Head Cognitive Process Re-engineering at IBM
Q: What role are strong supply chains playing in enabling a growing number of companies to rapidly pivot and produce products that fall totally outside their normal offering?
A: Shelves are now empty, and that illustrates the extreme volatility of supply and demand. Organizations need to focus on two things when it comes to strengthening supply chains in times like this. Tightening the connection between supply and demand in the immediate term to meet the needs of consumers, and getting a better understanding of which inventory is critical.
Having a more solid understanding of customers’ priorities right now is what ensures they’re serviced with the products they need. In many cases products that are not normally restricted are now being moved to an allocation or push supply chain which requires a different lens. Pivoting to an entirely different way of working supported by technology like AI and location data.
So right now, strong supply chains are those that are operating dynamically based on external data at the state and local level to meet shifting demand – and then reacting quickly to those needs.
Q: What lessons should manufacturers learn from this "new reality," and what should that mean for future supply chain development?
A: Manufacturing and supply chain professionals have been talking about a need for more synchronization and greater automation for a while, and we’re going to see the implications of those discussions at a much more rapid pace following the outbreak. Businesses will now realize how important a sustainable, successful supply chain is to their stability and growth.
Learnings from the disruption of COVID-19 should signal a mission-critical need for an acceleration of investment in hyper-automation and digitization while moving more toward intelligent workflows supported by data and demand insights. That is how businesses will fill the cracks highlighted by this pandemic, and emerge stronger once we enter our ‘new normal.’
Deborah Jennings-Conner, Director of Global Life & Health Sciences, Regulatory & Testing Assurance at UL
Q: How important of a role can existing supply chains play in making this type of transition effective?
A: Leading medical device manufacturers and suppliers are well-versed and entrenched within the rigorous FDA framework. Their ability to increase FDA-approved medical device availability by partnering with a potential new non-medical manufacturer has the ability to speed critically needed medical products to the healthcare community. Under the guidance of a veteran medical manufacturer, retooling a non-medical factory to start producing medical devices means the original equipment manufacturer (OEM) essentially just adds an alternate manufacturing location. Veteran medical OEMs have experience adding or moving manufacturers and can help to speed the start-up process.
The medical OEM also already has in place the needed control processes to ensure the products sent to the market are the safe and effective FDA-cleared products. We recognize current supply chain challenges. As a resource, UL works with many global suppliers and maintains ProductIQ, a database that allows you to locate a product or component that meets your needs.
Tealbook CEO Stephany Lapierre
(Note: Tealbook is working with GM and Brooks Brothers to help address supply chain issues.)
Q: What challenges have Tealbook helped these large manufacturers overcome?
A: Large manufacturers like Brooks Brothers are working hard to shift their manufacturing to produce PPE and ventilators to support the COVID-19 crisis. However, these are not their usual suppliers--they are working in uncharted territory. Supplier relationships are typically created over several years and after deep evaluation. Making such a sudden shift requires a lot of industry insight and immediate knowledge on who can provide goods and services that meet specific standards.
Take for example an n95 mask. Did you know that assembling the pieces together once the parts and materials are acquired is the easy part for the large manufacturers? The hard part is that an n95 mask actually requires 8 layers: Spun-bond polypropylene and hydrophilic plastic, cellulose with copper and zinc ions, melt-blown polypropylene, more spun-bound polypropylene, aluminum, steel, spandex, and polyurethane. It’s actually the polypropylene which makes the mask n95 grade (removing 95% of air particles because of the .1-micron holes in the material which block any particles of a larger size). So, you can see that this is a complicated task, that requires harnessing a diverse array of suppliers.
In addition, we are not only helping clothing retailers with masks and protective garments, we are also working with larger auto manufacturers to find the necessary suppliers of ventilators and hand sanitizers. Once we help these companies source these important materials, we also then inform many other companies in the market who have shifted to producing these items, so they can get these critical supplies into the hands of those who need it most in the shortest amount of time. Tealbook uses autonomous supplier data enrichment technology that monitors data across 400 million sources to create a universal supplier record for all B2B companies in the world. We have deep knowledge of all local and global suppliers across industries and know exactly who can provide each of the products mentioned above. For Brooks Brothers and many other large manufacturers, Tealbook is providing free reports that include a list of qualified and trusted suppliers so they can quickly shift their production to help support COVID-19 first responders.