Published 24. Dec. 2020
Towards Supply Chain Resilience: Highlights from Nordic StrategyForum Supply Chain and Procurement
Supply chains were one of the hardest hit areas during the coronavirus outbreak, and CSCOs spoke out on the challenges and triumphs they faced amid the lengthy disruption.
At the recent Nordic StrategyForum Supply Chain and Procurement virtual event by Management Events, supply chain decision makers gathered together for interactive discussions on rising trends and concerns.
Covering issues from business adaptation and remote working to management styles, in-depth insights were abound throughout the discussions.
TAKING ADVANTAGE OF CHANGES
As one of the largest disruptions that the supply chains have ever experienced, the COVID-19 pandemic took many companies by surprise with challenges such as the availability of materials, pricing, and delays in new vendor development.
A Chief Supply Chain Officer (CSCO) observed that every 5 to 7 years, there’s some kind of event that affects the global supply chain, like the 2010 Icelandic volcano eruption and the 2011 tsunami and Japanese nuclear reactor disaster.
But the disruptions caused by those events lasted for about a month, whereas with the coronavirus outbreak, the disruption has lasted more than 7 months so far with no near end in sight. Many supply chain leaders expressed that the ensuing supply chain upheavals were unexpected and unprecedented.
Management Events’ Nordic StrategyForum Supply Chain and Procurement
For instance, there was suddenly a drop in the availability of pallets, containers and packaging. As one attendee mentioned, “There were premiums on getting containers, leaving our goods stranded in production countries.”
“Then there was the increase in demand for toilet papers, consumer goods, home office equipment and medical goods while demand for cars and machinery suddenly halted. These were very volatile times.”
In regards to that, a participant shared that being closer to the end market is vital at the moment.
“We have to understand the demand picture and be more involved in how supply is working. We also have to understand the customers’ needs and be even more service-minded about fulfilling the needs.”
The disruptions that emerged from the pandemic were also concerning for supply chain executives as countries experienced waves of the virus and lockdowns at different times.
“The crises you are working on keep changing,” voiced a supply chain leader. “From March, you try to stay ahead and stock up on the right products in the right location. Spring was quite good, but then suppliers were forced to close down so even if you have the chain open, production has stopped.”
Others expressed the same sentiment:
- “There are always new things coming up, always a new hurdle to go over.”
- “There have always been hurdles in the supply chain, but now they are coming at a faster pace.”
However, some have taken the changes in stride, learning from the first COVID-19 wave and preparing for growth and agility opportunities:
- “These changes have forced us to make faster decisions, but this is also better decision-making.”
- “We have become more sustainable as a company, going from supply chain via air to sea.”
As commented by a top supply chain manager, “It is volatile now, but in the long term, this will stabilize,” and while the pandemic was a shock back in March, the shifts undertaken were “mostly minor permanent changes”.
Join us: Don’t miss the next Nordic StrategyForum Supply Chain and Procurement coming in October 2021 for the latest trending supply chain issues and topics.
RISKS AND RESILIENCE
“This is a ‘new normal’. Will this affect the way we think about risk?” one of the leaders questioned. “Will this lead us to be more resilient in the future?”
According to a participant, COVID-19 offered a chance to reconsider risk strategies and situations, such as the risk of no delivery from a cheaper, offshore delivery versus a more expensive but guaranteed, nearshore delivery.
Another risk assessment includes planning supply chains amid local lockdowns of regions, countries and hubs. As a decision maker probed, “If a hub is locked down, how do you ensure supply chain from other locations?”
This is a particular concern with the participants because the lockdowns affect various parts of the supply chain at different times and in different countries.
“There are lockdowns that stop delivery of raw materials, lockdowns of factories, and lockdowns that stop shipments, so it’s not a lockdown that happens all at the same time, but in random order.”
A supply chain manager commented the challenge was bigger for those who source products from European suppliers while another specified that, “Electronic products were the most difficult to obtain as they all come from Asia.”
Others related that Tier 2 suppliers were the actual challenge with the participants encouraging end-to-end talks to better connect the supply chains and searching for source alternatives to ensure sustainable supply chains for the future.
There were other topics brought up during the discussion on risks. One of which was the leverage and advantage of having a decentralized supply chain model, and the other was on the issue of Brexit, which a top-level executive stated is a big risk within the supply chain.
Many of the participants mentioned positive factors about their current work situation, citing efficiency, savings on time and costs, and faster decision-making as some of the upsides of remote working.
“Remote work is surprisingly good,” exclaimed a CSCO. “For global supply chain, you were already used to working remotely with global teams, but this change has intensified the investment in tools and processes for better remote working.”
“People working from home meant quicker implementation of digital solutions, and employees are more willing to use these new tools.”
Another reported that, “From the HR perspective, it turns out that remote work is a competitive advantage for white-collared workers. Alot of employees enjoy working from home due to the balance of work and family.”
However, there are concerns with remote working.
“In Europe and the USA, there’s an issue with ergonomic working spaces at home,” an attendee shared. “While in other parts of the world, such as Africa and Asia, there’s an issue with local internet connections and connectivity.”
Others shared that it’s hard to conduct remote team building, and that some employees are still unused to virtual working. Furthermore, even with the benefits of remote communication, there is still the need to have real meetings and contact with colleagues and customers in the future.
As can be seen in many industries, the implications of COVID-19 drove huge advances in digital progress, and decision makers in the supply chains agreed that digitalization is one of their most important projects and investments.
“The crisis led to rapid developments in virtual inspections through camera, with video meetings allowing us to record what is seen and said during the inspections,” a C-level executive revealed.
“It saves a lot of time compared to sending people around the world. Of course, we still need to go there, but first checks can be done virtually even if final checks are done in-person.”
Nevertheless, supply chain organizations have to step up with the digital processes and routines to ensure they are continuously updated with all the markets and functions in their company.
CHANGE IN MANAGEMENT STYLE
While many of the participants mentioned that their companies have taken the opportunity to develop their workforce and invest in educational and university courses for their staff, they have also made changes to their leadership style.
A senior executive commented that calm management is the key in handling this large and demanding crisis. Others agreed with the statement, claiming that leadership in general is vital – not just with the team but with suppliers as well.
Some explained that their management approach has changed into a more coaching style whereas others were focused on promoting better team spirit and culture by having daily meetings to produce more efficient employees.
However, similar to the discussion findings in Sweden 600Minutes Executive IT, the biggest management challenge is with new employees, from remotely onboarding them to building team rapport from a distance.
As the world moves into 2021 with the coronavirus still affecting businesses around the world, supply chain leaders need to make preparations for multiple case scenarios coming in the future months.
From new waves of the virus and the facilitation of the COVID-19 vaccine to implications from loosening lockdowns and repeated changes in customer demands, sustainable and resilient supply chain solutions will undoubtedly be foremost in the minds of Chief Supply Chain Officers.