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05.01.2021

Blog series | Trends and issues in the supply chain: disaster mitigation and crisis management

The global pandemic is an example of a health crisis which has impacted all areas of everyday life and the economy. It has also caused major disruptions to the global supply chain.

While we tend to think of a pandemic as a highly exceptional form of crisis, experts believe that pandemics are likely to become more frequent in the future; mostly because the probability of animal-to-human disease transmission has increased sharply. Health crises are not limited to the human population: diseases like the swine flu can be highly contagious, and directly impact the meat supply chain. 

A category of disasters that occur much more frequently are natural disasters. These include floods, droughts, hurricanes, wildfires, or earthquakes. In the aftermath, supplies and relief services must be transported to and administered in the affected regions. Often, the infrastructure and transport routes have been damaged or destroyed. Experts agree that due to climate change, natural disasters will likely occur more frequently in the future, even in regions that previously did not experience them.

What does this mean for the supply chain?

It increases the likelihood of supply shortages: these are caused by sudden, unexpected increases in demand, or when certain goods and services become unavailable, for example when producing countries or regions are temporally shut down due to a disaster.  

It can cause an interruption of transport routes and/or a lack of sufficient transportation capacity: These prevent supplies from getting to the locations where they are needed most.

It creates the need to (re)build infrastructure where it was destroyed or where the disaster has created a new need for things like warehouses or datacenters.

Labor challenges become a bigger problem: these range from temporary labor shortages due to unexpected rises in workload, to the need to accommodate new safety procedures or distancing requirements during pandemics. 

And today’s economy is a truly global network: supply chain disruptions in one region can seriously harm businesses across the world. For example, the COVID-19 shutdown in China slowed industrial production which caused supply shortages and manufacturing stops for companies worldwide.

How can these effects be mitigated?

Technology solutions can make a business’s supply chains more resilient and help mitigate the impact of future disasters and crises. 

Digitization of logistics processes is essential to this effort. It increases the visibility into the raw materials, supplies and finished goods, their location and different transport options. 

Below a few examples how this can be achieved.

Cloud hosting: 

Deploying supply chain solutions in the cloud will significantly increase the resilience of supply chains. A cloud platform with regionally and even internationally redundant datacenters can ensure continued availability in case of disasters. Not only will warehouse and transportation management systems continue to operate, the information is remotely accessible for all employees and can be shared with partners, customers and even disaster relief organizations as necessary. Cloud hosting also allows customers to scale their supply chain software up and down as needed to help mitigate the disaster’s impact.

Warehouse management systems (WMS):

WMS can comprehensively track and manage all products in a warehouse, and also across several different locations. This provides perfect visibility into stocking levels and movements of goods, as well as advance notice about decreasing stocks and shortages of materials. This visibility ensures early awareness of potential supply issues and enables managers to plan around them as much as possible.

Transportation management systems (TMS):

TMS provide transport planning, scheduling, and monitoring capabilities, whether by road, rail, air, or sea. They can also update transport arrangements via different routes or carriers or find alternative means of transport in case networks are disrupted by disasters.  

Distributed order management (DOM):

DOM provides a comprehensive view of current inventories at multiple sites and in transit, availability of stock and utilization levels of warehouses and transport options. DOM offers meta-level visibility to help plan around disaster impacts, for example by relocating stocks to unaffected regions or sourcing orders from alternate warehouses. 

Voice:

Voice-directed work in a busy warehouse, (especially one that has changed due to a disaster) improves safety by allowing workers to have their hands and eyes free. Additionally, voice simplifies and automates training for new workers and allows them to get up to speed more quickly. 

Robotics: 

Autonomous mobile robots (AMRs) can be deployed to help with temporary labor shortages in the warehouse, or to help handle dangerous goods. 

Conclusion

Preparing for disruption is vital to future-proof a business, as it will be affected by some form of it sooner or later. Resiliency can be built with technology which protects businesses from uncertainty. This way, a continuous supply chain is provided, strengthening relationships between business partners and customers.

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