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Deloitte: How supply chains can thrive post-COVID-19

Supply chains that embrace interconnectivity and transparency will be better placed to deal with uncertainty, reports Deloitte

Janet Brice
|Jan 4|magazine13 min read

Lessons learnt during the pandemic looks set to shape today’s supply chains and how they deal with uncertainty in the future, according to consultants Deloitte Insights. 

According to Deloitte’s report, Looking beyond the horizon; Preparing today’s supply chains to thrive in uncertainty, COVID-19 demonstrated the power of interconnected, digital supply networks (DSNs) to help organisations to anticipate and respond to unexpected changes and minimise their impacts.

“While COVID-19 certainly caught the world unprepared, the fundamentals of what it will take to compete in the post-pandemic world shouldn’t,” commented Deloitte. 

“The seeds for change were sewn long before “social distancing”… those supply chain organisations that can embrace the new normal, invest in the future and embrace interconnectivity and transparency could be best positioned to thrive.”

As part of Deloitte’s Respond, Recover, Thrive supply chain series, the new paper looks at how organisations can revisit their supply chain strategies considering what they have learned during the pandemic. “This will allow and prioritise the capabilities they expect to require going forward to thrive in this new normal,” comment Deloitte.

The report calls on supply chain leaders to focus on three key areas:

  • Shifts in reality - recognise shifts in customers, business operations and technologies, ecosystems, and workforce 
  • Thrive amid shift - assess your organisation’s ability to thrive amid these shifts
  • Position to thrive - position the organisation to thrive by taking tactical steps

The report suggests the crisis helped accelerate shifts in what customers value, how customers buy, and how businesses need to operate differently to meet customer requirements and earn their trust and loyalty. 

Key supply chain shifts in the “new normal” are identified as:

  1. Meeting evolving customers values and product service requirements

Leaders should evaluate their ability to market and sell their products and services in the post–COVID-19 world. The report poses a set of questions supply chain leaders should ask relating to serving the connected customer, customising product or service and positioning for productivity. 

“The answers to these questions focus on the intersection of supply chains, new product development, customer strategy, sales, and finance. Organisations should take a renewed end-to-end look at their customers, products, and operations through a “cost-to-serve” lens and make informed choices that balance cost and effort with value, perceived willingness to pay, and sustainable business growth,” comment Deloitte.

  1. Building trusted, connected supply networks

“The key to automated, predictive, and prescriptive operations in the post–COVID-19 world lies in the interconnectivity of digital tools, physical infrastructure, and their underlying data streams. Tools such as the Internet of Things, cloud computing, and 5G make it possible to create new sources of data from the physical attributes of a supply chain,” says the report.

  1. Designing supply chains that are optimised for cost, service, and resilience

“Leading organisations can apply advanced technologies to fundamentally rethink their supply chains, enhance their real-time understanding of activity in complex supply networks, and leverage continuous scenario planning to optimise the balance of cost against risk and agility of their production capacity footprint,” says Deloitte.

Although designing a supply chain that is both resilient and efficient is challenging the payoff can be a more resilient supply chain, better prepared to weather future disruptions with fewer impacts to cost and service.

  1. Enabling the future of work in supply chain management and operations

In a Deloitte June 2020 study, CEOs said that they expect a third of their workforce to be working in a full-time remote capacity by 2022 which means manufacturers are likely to spend more on data management capabilities aimed at facilitating remote operations and improving operational efficiency.

“Adapting to these four shifts takes hard work, honest assessments, and a long-term lens on investment. So, what sort of capabilities should supply chain executives consider deploying now as they continue to build out their DSNs in a thriving environment? 

“We expect the answer to evolve alongside the technology curve. Leaders can consider multiple actions now to adapt their supply chains to these shifts, so they can thrive in the post-pandemic world.”

Make the supply chain an integral part of the corporate strategy

The report highlights that by making the supply chain part of the business strategy this could ease problems. “Companies should challenge the long-held orthodoxy that supply chains exist simply to meet the commercial needs of the business. Instead, supply chain considerations should become central to business strategy,” comment Deloitte.

Lay the digital foundations to enable corporate strategy

Data has become the new currency upon which success or failure can be measured, says the report. Technology is expensive, but with the rise of cloud-based solutions, executives now have access to lower-cost products and a range of providers which Deloitte point out will drive innovation and nimbleness at a lower cost and faster speed to market.

Identify what (and who) you’ll need to get it done

“Supply chain leaders should take an active role in planning and designing for their organisation’s future of work - particularly with respect to identifying areas for automation within the supply chain and determining where and how to redeploy (and upskill) the workforce, and what skills and capabilities they’ll need to set themselves up for growth,” comment Deloitte.

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