Brian Umbenhauer, leader for consulting with Deloitte Private, reveals the findings of the firm’s latest survey of private companies and their approach to managing global supply chains in a crisis.
The survey of some 3,000 private companies was designed to elicit how those organizations are responding to the COVID-19 pandemic, as well as steps they might already have taken prior to the crisis. The primary focus was on efforts to achieve supply chain resiliency — “how leading organizations are powering through to the other side, and hopefully emerging even stronger,” Umbenhauer says.
The study looked at seven key attributes of global supply chain management: strategy, growth, operations, technology, workforce, capital and social responsibility. What it found was that the top quartile of performers had already made significant strides toward improvements in those areas prior to the pandemic. But others are lagging. The bottom quartile consists of companies that haven’t given much thought to the issue of resilience. And in the middle are those organizations that have made some progress toward that goal, but have much more to achieve.
Efforts to embrace resiliency include a strong focus on technology, such as the creation of “smart” factories driven by artificial intelligence, the cloud, robotics, cybersecurity and other elements that make up a supply-chain digitization initiative. But leading companies are also ranging beyond the factory to address better communications with multiple tiers of suppliers. They’re also turning away from sole-sourcing arrangements, which generate the risk of supply disruptions even though they often make the most sense from a cost perspective. Some degree of inventory and component redundancy turns out to be a wise strategy for ensuring continuity of supply in the event of the inevitable supply chain disruption — a lesson that the pandemic has taught many organizations.
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