Countering the next Disruption – Preventing another Ever Given with resilient supply chains

1. Countering the next Disruption – Preventing another Ever Given with resilient supply chains Without an open mind and a willingness to experiment, it’s difficult for businesses to thrive in this uncertain world. Companies need to prepare for the next big disruption. When a new technology, trend, or business model emerges and has the potential to significantly change how we work and live, we call it an ‘upheaval’. In other words, a catalyst for change that could have a lasting impact on society. We’ve already experienced multiple upheavals in our industry that have forced us to adopt new technologies and processes: the industrial revolution with its mechanical engines; the computer age with its electronic computers; and now the digital era with its software algorithms. The transformation to a digital world continues to accelerate. Digital technologies are disrupting traditional ways of doing business and creating whole new markets at the same time. Many industries are currently facing what management gurus have labeled “The Fourth Industrial Revolution” or simply, the digital transformation. This has been necessitated by the many disruptions caused to global supply chain systems. Indeed, in the past few years, we have seen enough evidence of big changes coming our way to due to Supply chain disruptions. Ever Given – what happened? In 2021, the world’s eyes were on the Suez Canal for six days when the Ever Given- ultra-large container vessels (ULCVs)—got stuck in the narrow waterway. It mattered because every day dozens of ships carrying billions of dollars of cargo had to wait to enter the waterway. The blockage of the canal caused the supply chain to be disrupted. Nowadays, 90% of global trade is made by maritime transport and 12% of the trade passes through the Suez Canal. Further, it increased the sensitivity of this situation. Maritime accidents causing Supply Chain Disruption The Ever Given scenario disrupted the supply chain which created fluctuation in transport routes, an increase in transport distance, and increased freight rates and shipping costs. There

2. have been many financial impacts on the supply chain such as security problems at ports, increases in oil prices, costs to customers, etc. With the blockage, new issues have emerged that need to be taken into consideration in the supply chain. This situation causes the necessity of turning the supply chain into an agile supply chain that can rapidly turn against unexpected risks. Furthermore, it is needed for the supply chain to be geographically dispersed and to invest more in data and technology. This includes developing robust supply chains that are resilient to disruptions and can withstand the extreme situation. To prevent another “Ever Given” scenario, businesses need to identify the areas that will be most affected by technological change and develop strategies for mitigating risks associated with these new trends. What is the next big supply chain Upheaval? A major factor in future changes is the evolution of supply chains, particularly when it comes to shipping. The digitization of shipping, which is currently in the research phase, could have a huge impact on supply chains by reducing time, emissions, and costs. Shipping is one of the largest industries in the world, and it is currently being revolutionised by the deployment of autonomous vessels and the use of blockchain technology. Major Causes An increase in data volume and velocity, the rise of the digital economy, and a transition to green energy are some of the major causes of the Upheaval. Data volume and velocity are increasing due to the growing number of connected devices and sensors. The transition to green energy is the result of governmental regulations and technological innovations. The increased use of digital currencies and the transition to the Internet of Things (IoT) have also contributed to the digitization of the economy. The digitization of the economy has led to the emergence of new data-based business models and a shift in the way goods and services are delivered. Steam engines, electricity, and the telegraph triggered the First Industrial Revolution. The introduction of digital technology, the Internet, and computers triggered the Second Industrial Revolution. And now the shift to artificial intelligence, robotics, autonomous vehicles, and blockchain could be the trigger for the Fourth Industrial Revolution.

3. Resilient Supply Chains to Prevent an Another Ever Given The best way to prevent another Ever-Given situation is to build resilient supply chains. Resilience means including enough slack in the system to minimize or quickly recover from a disruption. Businesses can do this by investing in resilient supply chain finance networks that have a high level of automation. These supply chain Finance should also be digitally enabled to enable better decision-making and tracking of inventory. Additionally, businesses can make use of emerging technologies, such as artificial intelligence, automation, and robotics, to improve the efficiency of these supply chains. Supply Chain Financing – A solution to Capital Issues Due to the high cost of service and the risk of lending without proper collateral, banks limit their exposure to MSMEs. Due to a lack of organized financial data, historical cash flow situation, repayment trends data, etc., credit risk assessment is difficult for lenders. A vicious circle of high expenses, low profitability, restrained expansion, and an inability to resist even mild economic shocks is the direct effect of this financing gap for MSMEs. The COVID epidemic causes an economic disruption that leads lenders to almost immediately tighten their lending conditions for those select few who have access to the banking system. Given the importance of MSMEs to economic growth, it is essential to help them by reducing growth impediments connected to working capital. Supply chain financing (SCF) is essential to accelerate the growth of MSMEs. SCF stands for technology-based solutions that help buyers and sellers in a sales transaction minimize financing costs and operate more efficiently. They benefit from it because it fills up financial gaps and provides much-needed cash. Due to the nature of SCF transactions, lenders are able to accept additional partners because the documentation and underwriting processes are streamlined and take less time. Technology advancements make it simpler to advance money to small firms without using a lot of resources or having a negative effect on the bottom line. Everything from onboarding through distribution and settlement may be automated. MSMEs may quickly obtain heavily subsidised financing from a number of banks and NBFCs via Trade Receivable Discounting System (TReDS) platforms. SCF is a solution that would assist MSMEs in a variety of ways. It is necessary to inform MSMEs and their anchors about these possibilities for enhancing cash flow. Strategies to build resilient supply chains

4. To build a resilient supply chain, businesses should implement the following strategies across the supply chain: – Develop a long-term strategy – Understand your supply chain – Identify areas of risk – Deploy the right technology and partner with the right platform provider – Engage with consumers AI, Automation, and Robotics Artificial intelligence (AI) is the simulation of human intelligence through machines. It is a technology that enables machines to learn without being programmed. AI can be used in several supply chain activities, including forecasting, production planning, and demand forecasting. Supply chain planners and analysts often use forecasted demand to inform their production decisions. AI can be used to forecast demand more accurately by incorporating data from sensors and other Internet of Things devices within a company’s supply chain. Automatic identification and data capture technology (AIDC) can help improve traceability with the use of Radio Frequency Identification (RFID) and Barcode scanning. AIDC technology can also be used to improve the safety, efficiency, and accuracy of shipping operations. Digital Transformation The digitization of supply chains has helped companies improve their efficiency, visibility, and customer experience. It has also enabled them to reduce costs and environmental impact by using assets such as robots, software, and sensors to complete tasks previously done by humans. Digital transformation has not just affected the movement of goods and services. It has also transformed the organizational structure of companies, including the structure of supply

5. chains. Digital transformation in the supply chain can be described as a transition from traditional manual methods of organizing and managing supply chains to more advanced and automated processes. Conclusion The future promises to be even more disruptive than the present. Companies must be prepared to respond to the next big upheaval by building resilient supply chains. They can do this by selecting partners with the best AI capabilities, sourcing products from multiple vendors, optimizing transportation routes, creating a “just-in-time” inventory strategy, and creating an emergency response plan. They must also be prepared to respond to changes in the business environment through digital transformation.