Dealing With Large-Scale Supply Chain Disruptions in 2021

Hindsight May Be 20/20 but Let’s Hope Supply Chain Isn’t Like 2020

Thanks to the coronavirus pandemic, the adage “hindsight is 20/20” has taken a whole new meaning regarding supply chain management.

Major breakdowns on a global level spurred an industry-wide awakening that was decades in the making.

Although companies learned how to cope with on-the-fly solutions (think: duct tape and bubble gum), most pushed long-term investments to the side as they grappled with immediate issues.

Now in 2021, with the apex of chaos receding in the rear-view mirror, companies - with the benefit of hindsight - can begin unpacking the lessons learned in order to move forward.

A recent Forbes article sets out to do just that, by highlighting the work of Yossi Sheffi, an MIT professor who penned The New (Ab)normal: a part retrospective, part guidebook meant to map out supply chain's new path. Some of Sheffi’s observations are fairly common sense.

Read the Article: Riding the Pandemic’s Wave of Change through Retail Supply Chain Innovation (Yossi Sheffi)

For instance, he notes that companies will want “to keep supply chain flexibility and speed but not cut corners” through implementing the right technologies and practices.

However, Sheffi glosses over the full impact of lessons learned in 2020 by referencing one-off companies that “succeeded,” and claiming the delivery of essential food items acted as proof that supply chains, as a whole, managed to “hold” - severe medical supply shortages notwithstanding.

“The biggest takeaway regarding supply chain’s 2020 trials and tribulations? The supply chain did hold.” - Sharon Goldman

I hate to be the bearer of bad news, but band-aid solutions and exception-to-the-rule cases don’t change the fact that much of the supply chain industry is still hanging on for dear life.

Unfortunately, most companies with supply chains are far from where they could be in order to deal with other large-scale disruptions (such as trade wars or climate disasters, to name a couple of likely scenarios).

Think of it this way: while almost every other function (e-commerce, remote work, telehealth, education, etc.) used the pandemic to upgrade its processes and systems to a Tesla-equivalent, supply chains decided an oil change and some new tires in the 1990’s Mini-Van would be sufficient. Sure, it can probably run another 100K miles. But wouldn’t it be smarter to catch up to speed on how the game has changed in the past 30 years?

Fortunately, the supply chain industry doesn’t have to reinvent the wheel in order to make a substantial upgrade. A dynamic approach to supply chain management already exists, and it provides everything companies need in order to integrate lessons learned and create a more robust supply chain: one that applies agile processes towards disruptions in real-time, powerful analytics that address and resolve root causes, and exception management practices that pave the way for long-term growth.

Moving Forward in 2021 With a Dynamic Approach

In order to move forward in 2021, it’s essential to understand that the shortcomings exposed in 2020’s supply chains largely stemmed from an over-dependency on the concept of resiliency.

The resiliency model relied upon outdated technology that hampered visibility and decision making, while also preaching impractical recommendations that most companies eschewed in the race to get their products out the door as fast as possible.

As a result of these practices, supply chains buckled when demand increased (for both life-saving items such as PPE and less urgent ones, like flour), and serious virus-related obstacles decreased supply.

The resulting calamity has set the stage for a new age in supply chain management: one which recognizes the serious flaws created by these outdated practices and replaces them with the right processes and technologies.

What does this look like? Not to place too fine a point on it, but relying upon the “people who did heroic things” during the pandemic (i.e., supply chain workers who almost single-handedly kept the industry afloat) isn’t a sustainable or viable option (or humane one, for that matter).

Instead, companies can make use of the technology available to them now, which is easy to implement and provides flexibility and resourcefulness for dealing with any disruption.

Elementum customers, for instance, have found success by relying upon a five-step process to dynamic supply chain management:

1. Identify: proactively identify all exceptions via APIs and other automation
2. Centralize: make exceptions out of email and Excel files and place them all in one common platform
3. Assess: assign owners, prioritize, and set SLAs
4. Execute: collaborate internally and externally to resolve the exceptions before they impact the customer
5. Optimize: leverage real-time analytics to identify trends and implement corrective actions

Elementum Customer GCC

GCC is a leading producer of cement, ready-mixed concrete, aggregates, and innovative solutions for the construction industry. GCC onboarded Elementum after a challenging 2019 in which severe flooding thwarted their best supply chain efforts.

After a few months of training and usage, GCC was able to resolve 74% of incidents before they reached the customer, reduce their incident rate by 42 percent, and protect at least $300 million in revenue.

We’re confident your organization will see the same results when working with Elementum. Get started today by visiting www.elementum.com to learn more about our platform, read customer success stories, or book a free trial!

About the Author

Nader Mikhail is CEO at Elementum. He is a passionate entrepreneur with 20+ years of experience building teams and companies. From starting his first company in high school to transforming Fortune 100 companies at McKinsey to modernizing the $25B supply chain at Flextronics, to starting a Silicon Valley tech company, he's been able to see businesses of all kinds, shapes, and sizes.

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