Striking a Balance Between Efficiency and Resilience in Supply Chain Management

1. Striking a Balance Between Efficiency and Resilience in Supply Chain Management Several processes of the global supply chain are recovering as the counter measures to the corona pandemic have started to take effect. However, the risks of global supply chain disruption continue due to intensifying geopolitical issues. For instance, the division of the world economy, increasing frequency of natural disasters and global warming, and systemic risks associated with cyber-attacks. Simultaneously, digitization has accelerated considerably. This has driven supply chains to focus more on customer value. In order to achieve this, supply chains need to be both resilient as well as efficient. Also, maintaining a balance between the two is crucial to not hamper the progress. Several organizations that were affected during the pandemic have faced inefficiency in their inventories. The ideal way out is to strike a balance between efficiency and resilience. In this article, we will discuss what supply chain management strategy can be implemented to mitigate this. How the Pandemic Impacted Supply Chain Management The Covid-19 pandemic has had a drastic impact on supply chain management. The supply chain disruption due to the pandemic has led to delays in production, lower rates of inventory turnarounds, unplanned shutdowns, and higher transportation costs. The major impact of the pandemic has been on the demand side. ● Consumers have been wary of travel, which has led to significant reductions in demand for certain products. Moreover, industries like agriculture and healthcare were significantly impacted due to the pandemic. ● The agriculture sector was hit the hardest due to a shortage of labor, and the healthcare sector was affected due to a shortage of medical supplies to treat people. ● The pandemic also caused a shortage amongst supply chain finance workers, which has been a challenge in managing supply chains. Additionally, there has also been an increased demand for supply chain management competencies as well. Due to all these reasons, supply chain managers and professionals are now required not only to focus on supply chain efficiency but also on resilience. This has led to increased focus on managing inventory stocks and planning continuity.

2. Importance of Stocking Inventories One of the key factors that have caused inefficiencies in supply chain management is the late ordering of materials or insufficient inventory levels. This is a classic example of what not to do when trying to get back on track after the pandemic. This entire situation can be resolved with proper stocking strategies and forecasts. Governments and trade associations have issued guidelines to help businesses minimize the impact of the pandemic. One of the most significant guidelines is to maintain inventory levels at all times. This will help businesses cope with the sudden drop in demand without affecting the supply chain, both in the short and long term. What is a Lean Supply Chain A lean supply chain is one that focuses on reducing waste within the value chain. This involves creating a simplified supply chain structure, improving supplier collaboration, and eliminating non-value-added activities. Similarly, the focus on the supply chain side for the sake of resilience and efficiency can help manage the pandemic impact. On the supply side, a key aspect is to ensure that there is a proper understanding of the demand forecast for a certain product. This can then be used to pre-arrange a schedule for the production of the product. Moreover, lead times can be used to predict if the product can be delivered on time. This can help in avoiding unplanned stockouts and expedite the process. At the same time, the demand side can also follow certain practices to help promote a lean supply chain. This includes streamlining procurement processes, focusing on supplier collaboration, and ensuring that the terms of the agreement are mutually beneficial. 4 Ways In Which Lean Supply Chains Can Be Used to Balance Efficiency and Resilience Inventory Management With a thorough understanding of the demand forecast, businesses can optimize their inventory levels. This will help them avoid overstocking, and it will also help them meet the demand at the right time. Preventive Maintenance

3. To avoid instances of unplanned downtime, businesses can plan the maintenance of their assets. This will help them avoid impacting the supply chain due to operational issues. Collaboration with Vendors Vendors can be used to forecast and estimate demand for certain products. This will help minimize the risk of overstocking or understocking products. Risk Management Risk management can be integrated into the supply chain to help businesses respond to unplanned scenarios. These efforts can help businesses be prepared for any disruptions in the supply chain. This will help balance the efficiency and resilience of the supply chain. Conclusion The corona pandemic has had a huge impact on supply chain management, leading to inefficiencies in inventory levels and unplanned shutdowns. In order to balance the efficiency and resilience of the supply chain, businesses can implement a lean supply chain approach. This can help businesses optimize their inventory levels, plan for preventive maintenance, collaborate with vendors, and integrate risk management practices within the supply chain.