WEF: How To Prepare Supply Chains For Future Disruption
Following the outbreak of COVID-19 last year, it has continued to spread across the globe, reaching pandemic status and forcing widespread lockdowns and closing doors for businesses worldwide. Governments have been forced into building new international supply chains over incredibly short periods of time following this unprecedented disruption.
It is widely believed that innovative technology, such as blockchain and artificial intelligence (AI), could increase efficiency in the supply chain, help to improve risk mitigation and management, and increase the velocity of goods running through systems. However, these supply chain solutions must be implemented as soon as possible, as second and potentially third waves of the pandemic pose a significant threat to the economy and international supply chains.
The lack of preparedness for such disruption was highlighted when the pandemic first struck earlier in 2020, with hospitals and governments scrambling to organise healthcare supply chains to provide enough PPE to frontline workers, and essential equipment such as ventilators to patients.
The initial supply chains had very little coordination, the purchasing and distribution of vital goods was made difficult and disorganised for organisations. PPE demand could not be met, stockpiles and medical distributors could not give healthcare providers and governments with the supplies that they desperately needed.
How can the supply chain become better prepared for disruptions, from COVID-19 and other issues?
One way would be to inject liquidity into the system. SMEs have been fulfilling a crucial role in the delivery of PPE to organisations fighting the virus. Blockchain technology can be implemented into the work processes of the SMEs to improve transactions between organisations and suppliers, as PPE margins grow thinner and pricing is scrutinised more intensely.
Additional liquidity in the PPE supply chain can facilitate greater supply and support local businesses and SMEs as they rebuild.
Incentivised data sharing can also be beneficial. Suppliers can share accurate information on what they’re sending, and how much of it they are sending, to who. A decentralised blockchain network can reduce the burden on the supply chain infrastructure, with each supplier able to access data along the supply chain.
Improved supplier relationships can help the sharing of data, improving visibility and traceability. Data placed on a blockchain can be authenticated and is the true version of itself.
To ensure PPE and other supplies of international supply chains that are essential during these times can reach countries in need, program buying should be implemented. This technique can help arrange quotas of goods from suppliers that can automatically replenished when inventory stocks run low.