The COVID-19 pandemic is not a one-time supply and demand disruption that will fade into oblivion. Its imprint on supply chain practices and practitioners is indelible. The odd thing is that many of these marks are positive. In the spirit of \u201cnever waste a good crisis,\u201d supply chain practitioners and technologists are bracing for a post-pandemic recovery with a new set of systems and practices.
\nSupply chain agility and supply chain risk management are two of the most important of these new systems and practices.<\/p>\n
Supply Chain Agility: How well a supply chain responds to uncertainties by quickly adjusting operations (and sometimes tactics) while still meeting critical success metrics is referred to as supply chain agility. The pandemic did not give birth to agility. It resulted from the supply chain’s digital transformation. The combination of large amounts of real-time data from the Internet of Things and advanced analytical techniques to mine new insights paved the way for supply chain practitioners to pursue supply chain agility. However, the pandemic accelerated supply chain agility adoption, transforming it from a practice to a strategy.<\/p>\n
During the peak of the lockdowns, the chief supply chain officer of a multibillion-dollar consumer goods company wrote that for every dollar spent on supply chain agility, the return is ten times that of traditional supply chain planning methods. Many practitioners have been taught that supply chain agility contradicts what they have been taught for decades. Experts have traditionally focused on efficiency and, as a result, have pursued the dream of the lowest unit cost. We used optimization techniques to reduce procurement costs while accepting larger order quantities and longer lead times.<\/p>\n