Why Supply Chain makes such a difference to our overall economy?
In order, to compete in the global economy, businesses need to outsource and create supply chains, as per industry experts. Tremendous level of collaboration is required for any supply chain. Slightest of disruptions ruin the whole supply chain system. For instance, car manufacturing cannot proceed without simple computer chips. Congestions at port paralyze many related industries.
When supply chains work as intended to, they stand out as marvel of modern business science. Stable supply chains help maintain prices of goods. Some of the most efficient people at the world’s largest corporations have dedicated their life’s work to maximizing every efficiency imaginable. These are deeply intricate, complexed logistical systems, but everything needs to be moving at the same time to maximize efficiencies. Ironically, this can be considered as the biggest vulnerability too.
There will come a time when supply chain crisis gets back to normal, but till then, the key going forward is inventory. There are shortages of many key components for manufacturers as well as labor – and stoppages in the global due to COVID – which leads to retailers facing plenty of different headwinds across different fronts.
Having a strong inventory position while providing convenience to customers — in many ways, just basic retail fundamentals — will position local retailers to meet demand. Government has a crucial role to play in this as well.
In retrospect, the pandemic in fact provided a good opportunity for businesses to get creative in configuring and balancing their business insourcing and outsourcing activities. Companies with a competitive edge will prevail in the long run. In the meanwhile, governments need to re-evaluate the infrastructure strategy with enhanced traditional pillars such as port capacities, and new developments in the fields of artificial intelligence, automation, and 5G information technology.