2021: The Year to Build Supply Chain Resiliency
While it took a year of unprecedented disruption, the C-suite is now putting a strong focus on supply chain resiliency. CEOs and CFOs no longer view the supply chain as just a business function that mainly operates in the background. They see it as essential to reduce organizational risk and drive competitive advantage.
There was initial hope that 2021 would bring about a full return to normalcy. But now, many business leaders are approaching the remainder of 2021 with caution. Although vaccines are rolling out and restrictions are being lifted, COVID-19 disruptions are likely to continue throughout the year. And even when we finally break free from the grips of the pandemic, we know that another disruption — whether natural or political — is inevitable.
In December 2020, I wrote in an article for Business Chief where I stated that the supply chain would take center stage in the business agenda for this year. As we enter Q2 2021, we can see this playing out:
- CFOs are taking a greater interest in how supply chains support business growth and reduce financial risk. The financial implications of supply chain disruption or inefficiency can be significant, with over 80% of a company’s costs tied up in the supply chain.
- Technology will play an essential role in improving efficiency and managing risk. Advanced technologies like machine learning, artificial intelligence, and digital twins were once considered luxuries but are now required to remain competitive. This is highlighted in the Gartner Hype Cycle for Supply Chain Planning Technologies.
- For the healthcare and life sciences industry, improvements will be imperative. This is an industry which is lagging behind others such as FMCG or high tech in terms of supply chain technology adoption. Yet, healthcare continues to be an industry that the world depends on, more than ever, in 2021.
- Until responding to pandemic disruption became the primary focus, the most pressing priority for many companies was sustainability and pledges to be carbon neutral by 2030. That goal may now need to compete with the need to achieve greater end-to-end visibility across the supply chain to identify vulnerabilities and risk. However, by achieving visibility, organizations can more accurately identify the inefficiencies that contribute to CO2 emissions and use these insights to make their supply chains more sustainable.
2020 was the year that pre-existing supply chain rulebooks were thrown out. 2021 is shaping up to be the year where business models are adapted to new ways of working. If businesses want to survive and succeed in a world where one disruption replaces the next, resilience and agility, powered by the latest supply chain technology, will be crucial.