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‘Serious (re)think’

Advice for local businesses affected by global supply chain chaos

Research

By Dr. Sajad Fayezi and Dr. Ginger Ke

Supply chains are the blood vessels of the global economy.

The COVID-19 pandemic has once again reminded us that if these blood vessels are “clogged,” chaos supersedes crisis and potentially exacerbates the financial, social and health costs in addition to the tragedy of human loss.

Dr. Ginger Ke wears a black coat and stands in front of the St. John's harbour.
Dr. Ginger Ke
Photo: David Howells

Since March of 2020, we’ve experienced so many difficulties, such as shortages in medical supplies, uneven distribution of vaccines, unfulfilled orders and prevailing price inflation.

These situations have all resulted from unprecedented disruptions and uncertainties faced by the global and local supply chains.

The crisis has caused a lot of businesses to start (re)thinking seriously about their supply chains and, more broadly, brought supply chain management to the front and centre of the narratives of government, community and civil society.

Dr. Sajad Fayezi wears a dark blazer and white shirt and stands in a hallway with glass blocking behind him.
Dr. Sajad Fayezi
Photo: Rich Blenkinsopp

Supply chain chaos is not new to Newfoundland and Labrador — given our remote location and harsh winter conditions — but never at such a severe level.

While in the early stages of the pandemic, the key driver of supply chain disruption was supply and manufacturing problems.

However, we’re now encountering demand increases, supply uncertainty due to energy reserve challenges in Asia, shipment and transport cost escalation and labour shortage affecting service level.

Moving forward, figuring out how to adjust to the new normal and improve supply chain resilience is a major question.

Developing a philosophy focused on risk management, enhancing supply chain agility, increasing supply chain transparency and fostering supply chain talent can all help businesses navigate through these uncertain times.

Be disaster-ready

Firstly, any internal or external risks may cause disturbances or even interruptions to the flow of products.

Thus, supply chain risk management becomes more crucial than ever when a disaster like COVID-19 hits.

Identifying, assessing, monitoring and mitigating potential threats to the associated supply chain, and developing an enterprise-wide philosophy based on risk management, can improve a business’s ability to respond quickly to unexpected events, and hence increase the chance of winning this relentless battle against uncertainties and disruptions.

Regional and local considerations

Redesigning supply chains for agility allows companies to swiftly sense and respond to a crisis while future-proofing supply chains.

Businesses need to not only sustain and bolster the norm of adaptability for learning (and unlearning) but also to realign supply chains (for stricter cost control), review for continuous improvement, accelerate sales and operations’ planning cycle and design flexible working arrangements.

In this context, supply chain academics and practitioners should give particular thought to the regionalization of supply chains (strategic/critical supplier co-location) and leveraging local alliances and trades.

Track it well

Supply chain transparency initiatives must be fast-tracked to allow members to promptly detect any issues occurring at any stage of the supply chain and communicate with other parties.

As risk propagates, lack of visibility and control can paralyze effective company response during a crisis.

New digital technologies, such as blockchain, machine learning and process automation, can facilitate the integration of supply chains as well as create secure and reliable tracking records of supply chain processes.

Invest in personnel

When facing a global catastrophe, personnel with the necessary skills to promptly seek practical solutions in ever-changing decision environments becomes extremely important in providing customers with the right and quality products.

Yet most companies lack such supply chain talent. This situation has imposed a major restriction on companies’ competency.

It’s essential to focus on people and create a winning culture to enhance resilience. This can be achieved by setting clear expectations and offering ongoing training and development opportunities.

Memorial expertise

The Faculty of Business Administration offers a supply chain concentration for students that will help cultivate professionals able to make agile and responsible supply chain decisions.

The professional development programs at Gardiner Centre also provide options for continuous education in supply chain management.

The Husky Centre of Excellence in Sales and Supply Chain Management aims to build the connection between the academia and local business community for advancing our province’s supply chain capabilities.


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