The supply chain silver linings playbook

For sup­ply chain pro­fes­sion­als, it has been a chal­leng­ing 18 months. A myr­i­ad of issues has plagued the glob­al sup­ply chain, includ­ing obvi­ous obsta­cles like the pan­dem­ic, chip short­ages, and extreme weath­er, as well as not-so-obvi­ous issues, such as ship­ping con­tain­er short­ages. Glob­al sup­ply chain teams have worked tire­less­ly to ensure mate­r­i­al is avail­able so prod­ucts can be built, shipped, and avail­able to pur­chase with min­i­mal dis­rup­tions to the con­sumer.

Sup­ply chain pro­fes­sion­als have the unen­vi­able task of mak­ing this hap­pen while man­ag­ing a high­ly flu­id glob­al envi­ron­ment that evolves dai­ly. It’s been chal­leng­ing to say the least, but glob­al sup­ply chains will emerge revi­talised, opti­mised, and more resilient in the long term. It might be dif­fi­cult to think this is pos­si­ble as the indus­try strug­gles to “sur­vive the day,” but there are trans­for­ma­tive changes hap­pen­ing behind the dai­ly chaos that will shape the world of busi­ness for decades to come.

The past 18 months have demon­strat­ed the crit­i­cal val­ue of sup­ply chain man­age­ment strate­gies to glob­al busi­ness­es. Over the past decade, the indus­try leaned out the sup­ply chain to improve work­ing cap­i­tal veloc­i­ty but, in doing so, made it so brit­tle that minor dis­rup­tions caused shock­waves. A giant boul­der was dropped on every­thing in 2020, and it was so impact­ful that it forced sup­ply chain pro­fes­sion­als to re-eval­u­ate many strate­gies that they had built and imple­ment­ed.

But it is not just sup­ply chain pro­fes­sion­als going through a re-eval­u­a­tion process. Exec­u­tive teams and boards of direc­tors are doing the same thing and under­stand­ing the crit­i­cal role sup­ply chains play in the suc­cess of a busi­ness. For­tu­nate­ly, as a diver­si­fied man­u­fac­tur­er, Flex has always under­stood the crit­i­cal role the sup­ply chain plays in both our and our clients’ suc­cess.

These past 18 months have also shown our clients that sup­ply chain oper­a­tions are a com­pet­i­tive dif­fer­en­tia­tor. Sup­ply chain pro­fes­sion­als now have a seat at the table from the very start because it is under­stood that how mate­ri­als are sourced and sup­plied are just as crit­i­cal as how the end prod­ucts are man­u­fac­tured and deliv­ered.

We’ve spent the last decade learn­ing how to man­age glob­al sup­ply chains, pri­mar­i­ly with Asia as a cen­tral hub. Begin­ning last year, many indus­try lead­ers pre­dict­ed that the volatil­i­ty of world­wide sup­ply chains would lead many busi­ness­es to imple­ment region­al­i­sa­tion ini­tia­tives.

The log­ic was that com­pa­nies want to build prod­ucts clos­er to their cus­tomers to reduce freight and logis­tics risk. Our team has seen this already begin to hap­pen with a few clients in a cou­ple of mar­kets. We expect to have con­ver­sa­tions with many more clients in the months and years to come as they look for ways to min­imise risk and speed up pro­duc­tion.

It’s not an easy deci­sion for most busi­ness­es. Sup­ply chain pro­fes­sion­als can’t sim­ply snap their fin­gers and relo­cate their entire man­u­fac­tur­ing, assem­bly, and freight oper­a­tions to anoth­er region. A sig­nif­i­cant amount of time and mon­ey must be invest­ed to analyse if a region­alised sup­ply chain would deliv­er val­ue over time.

There are also many addi­tion­al vari­ables, includ­ing con­straints on cost and labour avail­abil­i­ty and the organisation’s abil­i­ty to man­age the com­plex­i­ty of the tran­si­tion and ramp up with­out dis­turb­ing over­all pro­duc­tion. In the end, a return to a decen­tralised region­al sup­ply chain could remove lay­ers of com­plex­i­ty and improve time-to-mar­ket, but there will also be cost increas­es.

What a time to enter the work­force for the grad­u­a­tion class­es of 2020 and 2021! As entry-lev­el sup­ply chain pro­fes­sion­als take their first jobs, these his­tor­i­cal­ly adverse times will pro­vide a sub­stan­tial test of their apti­tude and sta­mi­na. At Flex, we’re see­ing our team rise to the chal­lenge for our clients and flat­ten their learn­ing curves to keep up. We’re liv­ing through an event whose impact will rever­ber­ate for gen­er­a­tions, and these recent grad­u­ates are in the trench­es with expe­ri­enced lead­ers to devel­op cre­ative solu­tions for sup­ply chain chal­lenges.

A big rea­son why these entry-lev­el pro­fes­sion­als ramp up so quick­ly is because of
busi­ness­es’ abil­i­ty to offer remote onboard­ing and train­ing. Rather than trav­el­ing to a man­u­fac­tur­ing site, see the man­u­fac­tur­ing process­es, and gain a thor­ough under­stand­ing of the sup­ply chain’s role, trainees now dive into online train­ing cours­es from the com­forts of their home office.

Sim­i­lar­ly, remote work enables sup­ply chain lead­ers to pro­vide advanced learn­ing ses­sions to high­light cur­rent dif­fi­cul­ties their teams are work­ing through or oth­er lessons with real-world appli­ca­tions. All hands are on deck, so it’s a great time to enter the field.

I’ll admit that one of the things that con­cerned me ear­ly last year was how my job would trans­late to a remote envi­ron­ment. I had just joined Flex, reg­u­lar­ly trav­elled to our major facil­i­ties and held in-per­son town halls to famil­iarise myself with our glob­al work­force. That all stopped when inter­na­tion­al trav­el was elim­i­nat­ed to help reduce risks.

While face­time and tour­ing facil­i­ties are crit­i­cal com­po­nents of my job, the ease and effi­cien­cy of video meet­ings and remote work have opened my eyes. In many ways, rela­tion­ships with my col­leagues, sup­pli­ers, and cus­tomers strength­ened while work­ing from home. Rather than meet­ing once a quar­ter for an in-per­son meet­ing, sup­ply chain pro­fes­sion­als meet with their peers mul­ti­ple times a week to help and sup­port one anoth­er.

This last part is espe­cial­ly vital as we nav­i­gate through this glob­al cri­sis. Sup­ply chain pro­fes­sion­als lever­aged video meet­ings to aggre­gate and man­age sig­nif­i­cant issues quick­ly. As we’ve seen, each coun­try has had its unique chal­lenges con­tain­ing Covid-19 out­breaks and man­ag­ing its vac­cine roll­out. These changes had imme­di­ate impacts on the sup­ply chain and required fre­quent col­lab­o­ra­tion between cross-con­ti­nen­tal teams. Work­ing so close­ly togeth­er cre­ates a more col­lab­o­ra­tive and trans­par­ent work­ing envi­ron­ment that is crit­i­cal to suc­cess.

This glob­al sup­ply chain stress test is iden­ti­fy­ing weak­ness­es in our sys­tems that like­ly wouldn’t have emerged oth­er­wise. Intel­li­gent sup­ply chain pro­fes­sion­als are stay­ing pos­i­tive and using these chal­lenges as an oppor­tu­ni­ty to find new solu­tions to emerge wis­er and more robust than they ever thought pos­si­ble.

Sup­ply chain pro­fes­sion­als would be wise to heed Win­ston Churchill’s advice, “If you’re going through hell, just keep going.” It can be dif­fi­cult to see the light at the end of the tun­nel dur­ing a tumul­tuous time, but if you step back and look at the past 18 months you can see Organ­i­sa­tions have imple­ment­ed new tech­nolo­gies and poli­cies that will pow­er their busi­ness­es for years to come.

Find out more about Flex’s sup­ply chain exper­tise at flex.com/supply-chain

Pro­mot­ed by Flex