Brittle Supply Chain – What Now?

17. March 2021

Not long ago, nobody would have imagined that a small, round virus would wreak this much havoc on the global structures. Things turned out differently than planned, and without mercy the pandemic has been exposing existing weaknesses, particularly those related to coordination along supply chains. The trigger may be Corona, but the tight-knit global economy reacts extremely to events with causes in politics, the economy or even natural disasters. Delivery bottlenecks, delays, minimization of profits – such are the problems that companies need to face today. Last year it became quite clear that the failures of the previous years in the supply chain result in drastic consequences. New concepts are needed to eliminate the pitfalls along supply chains and to optimize processes despite increasing competitive pressure.

Not only Corona, but also partly difficult trade relationships are forcing companies to think in new ways. One consideration, for example, is the expansion of inland production in order to reduce dependencies. The resulting higher costs can be counterbalanced by intelligent solutions. Efficient, careful use of capital and capacities are no longer buzzwords, but elementary components of optimized corporate processes. One of the challenges is to render supply chains more resilient to crises and to be able to respond flexibly to changing conditions. The first step towards this new normality is critical stocktaking. The relentless uncovering of weak points and a sober presentation of risks help identify potential for improvement so that critical factors can be purposefully mastered. This analytical approach is uncomfortable and cost-intensive, but with suitable tools and the appropriate know-how, a shortcoming can be transformed into an opportunity with enormous potential towards profit.

Changed framework conditions require flexible adjustments in order to continue meeting requirements along the entire supply chain in the best possible way, and to even allow room for improvement. The motto “never change a running system” is old news. Today, in the age of digitization, the motto is “change is the new world”. And it can already be observed in a variety of practical examples. Companies that permanently question their processes, constructively address weak points and proactively learn from mistakes demonstrate increased productivity with minimized capacities. Modern technologies are the foundation of these concepts, which resemble a meticulous choreography of all participants and in many cases fulfill the economic requirements of sustainability and eco-friendliness as a “side effect”.

The pandemic painfully taught us to embrace this progressive mindset, to get up from the comfortable armchair of habit and to actively shape the future. After all, progress can only be accomplished if changing process requirements are dynamically taken into account. Systems have the potential to shape these changing business habits in an automated way. It is now a matter of using this potential of software in a targeted way, and adapting it to the respective requirements.

One prerequisite of a supply chain management system is comprehensive transparency of the entire supply network. With speed, accurate planning of supply and demand, as well as concepts for failsafe performance and optimization of all means and routes of transport, the trust of decision-makers solidifies and establishes customer loyalty – the key to a successful business relationship. This goal can be achieved through a modular orchestration of individual components within a harmonious software landscape. Multidimensional business processes that integrate analyses, planning scenarios, relationships with suppliers and customers as well as business aspects provide the necessary agility and insights for constant further developments and adjustments to changing market situations – even at short notice and at all levels. Complemented by AI, machine learning and predictive intelligence, companies are thus optimally equipped for the future.

Author: Claus Engel

Image: © aristeer/