The global pandemic has put resiliency on the agenda of every company in the world. As they cope with the seismic changes brought about by COVID-19, businesses of all sizes and types have needed to adapt to remote work, reconfigured physical workspaces, and revised logistics and supply networks. They’ve also changed operating procedures to cope with the pandemic’s risks and effects.
But what do companies do now?
The reality is that supply chain shocks are usually impossible to predict but happen with frustrating regularity. That means real value is at stake.
The promising news is that organisations can both protect against downside risks, such as pandemics, and gain substantial economic returns from increased output and productivity.
The successful organisations today, and in the years ahead, will redesign their operations and their supply chains to protect against a wider and more acute range of potential shocks and disruptive events. Thus, there is a need for increased visibility on both the demand and supply side.
Supply chain digitization can enable organisations to have visibility across the whole value chain—from the production of raw materials to the end customer—and better meet the needs of their customers. A bonus: it improves the agility and responsiveness of operations without increasing costs. In fact, research by the World Economic Forum, in collaboration with McKinsey, shows that companies often achieve significant and simultaneous improvements in multiple performance measures when they integrate advanced digital technologies across the value chain.
Before the coronavirus hit, most companies were already accelerating the digital transformation of their customer journeys and value chains. The expectation is digital technologies to be at the core of the new normal, enabling organisations to better meet the needs of their customers, and improving the agility and responsiveness of operations without increasing their costs. Companies often achieve significant and simultaneous improvements across multiple performance measures when they integrate advanced digital technologies across the value chain. This also allows them to build resilience which is an internal trait, but the disciplines and strategies that support it can also have a far wider reach.
During the crisis, many businesses have been able to overcome staff shortages by automating processes or developing self-service systems for customers. These approaches can accelerate workflows and reduce errors—and customers often prefer them.
Digital approaches can transform customer experience and significantly boost enterprise value when applied end to end.
Also, technology-enabled methodologies can significantly accelerate cost-transparency work, compressing months of effort into weeks or days. These digital approaches include procurement-spending analysis and clean-sheeting, end-to-end inventory rebalancing, and capital-spend diagnostics and portfolio rationalization. However, the businesses will need to be smart and careful in their approach. Leading organisations are adopting increasingly sophisticated techniques in their strategic planning, assessing each resource and opportunity very carefully as the environment changes and new data emerge.
Now, with the likelihood of prolonged uncertainty over supply, demand, and the availability of resources COVID-19 represents the trigger for operations functions to adopt an agile approach to transformation.
‘’Risk, Resilience, and rebalancing in global value chains’’, (2020), S. Lund; J. Manyika; J. Wotzel, E. Barribal; B. Krishnan; A. Knut; M.