Supply chain

COVID-19 has highlighted the vulnerability in supply chains

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Author: Levine Naidoo, WW Frictionless Business Executive – IBM Sterling

The world is working overtime to combat the ongoing COVID-19 outbreak, while companies, organisations and individuals everywhere are doing what they can to help communities and contain the spread.

Right now, the priority is protecting as many people as possible and tactically addressing supply chain disruptions and risks. When recovery begins, it will be critical that we analyse infrastructure, supply chains, and global workflows to proactively prepare ourselves for any future crisis.

Where AI plays a role

Artificial Intelligence (AI) has never been about predicting the future; it’s about quickly processing a variety of information, estimating the likelihood of disruptive events, uncovering opportunities, and preparing appropriately for them. Currently, global supply chains are complex and fragile. This current crisis has illustrated as much, cutting off trade partners, slowing production and causing mass disruptions that have global repercussions.

AI with other technologies, including Blockchain, IoT, automation, 5G and edge computing can work together to make global supply chains more resilient, and less volatile.

Fixing the chain

It is now undeniable that supply chains are only as strong as their weakest link, and when those bonds break, the knock-on effect can be devastating. China’s shutdowns in early 2020 highlighted the need for global diversification of supply chains. With over 90% of Fortune 1000 companies having suppliers in COVID-19 affected areas, it’s become abundantly clear that now is the time to rethink how supply chains are set up.

Globally, government authorities and industry groups are working to establish safety protocols. These will most likely result in more checks and balances, the need to meet further regulatory obligations and the prescriptive adoption of defined industry standards.

So, while reshaping the supply chain, its operating model and workflows is an urgent task, it’s also imperative that we do it smarter. How we build agility and speed to organise, foresee and adjust to disruptions will make all the difference when these systems are next put to the test.

IBM’s Action Guide

Recently the IBM Institute for Business Value released a report called COVID-19 Action Guide: Beyond the Great Lockdown. It includes an imperative to define smarter supply chains and reshape operations.

  1. Thoroughly re-evaluate your enterprise’s sourcing strategy and supplier network. Weigh up how much risk your enterprise can handle, versus the amount of operational flexibility it needs. Use AI to model this data and deploy continuous collaborative planning, help predict disruptions and vulnerabilities, and then provide insight on corrective actions.
  2. Increase agility and reduce friction by accelerating adoption or development of cloud-based as-a-service platforms and alternative delivery models through partnerships and extended networks. Seek to include collaboration, automation, AI, blockchain, IoT and other emerging technologies within these platforms.
  3. Implement enterprise-wide operational visibility and AI-supported decision making. Along with a data-centric, collaboration culture, AI-infused workflows can break down silos to deliver a sense, think and respond supply chain capability.

Access further insights into how IBM is creating smarter supply chains here.

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