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COVID-19 and Supply Chains - The Digitalization Imperative

July 30, 2021 1368 2 COVID-19 Digital Transformation Industry 4.0

COVID-19 and Supply Chains - The Digitalization Imperative

The pandemic, COVID-19, has brought supply chain planning executives and managers back to the drawing board. They are trying to answer the fundamental question on, “What is supply chain disruption, and what can technology do to help prepare and respond better?” Asking this question is pertinent to deploying the right set of detection, alerting, and mitigation mechanisms, for a better-managed future and fully digitalized supply chains. Easier said than done, however, since the awareness about digital supply chains and what differentiates these from traditional supply chains is uncomfortably low. Yet, once understood, the benefits are so many that not digitizing may not be an option anymore. This whitepaper, a first in a series, lays the argument for digital supply chains to be understood in light of the outcomes these can achieve.

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The pandemic, COVID-19, has brought supply chain planning executives and managers back to the drawing board. They are trying to answer the fundamental question on, “What is supply chain disruption?” Asking this question is pertinent to deploying the right set of detection, alerting, and mitigation mechanisms, for a better-managed future. In the 18 months of this pandemic, global supply chain and trade volumes have swung wildly. At the onset, in April 2020, the World Trade Organization (WTO) had predicted that world trade volumes could fall between 13% and 32% in 2020. The range is highly uncertain, the WTO said, due to the unknown nature of the health crisis, its duration, and the effectiveness of policy responses.

Even as regional disruptions to a globally connected supply chain unfolded early-on, as per the cyclical waves of the pandemic, this time, supply chains experienced shortage spikes across the board – supply, demand, resources, as well as planning and response capacity – and very early into the pandemic. A survey by ISM in May 2020 revealed the top 5 challenges cited by supply chain and procurement executives.  

 

Source: Institute of Supply Management

While post-pandemic recovery timelines seem a lot more staggered and contextual – with the developed nations likely to see strong economic recovery by the end of 2021 on the back of a better-managed vaccination program, vis-à-vis, the African and Asian regions witnessing a long-tail COVID-19 trajectory – globally, supply chain executives are converging on a set of immediate-to-near term recovery strategies, with an eye on greater resilience in case of another disruptive wave.

Emerging Immediate-to-Near Term Supply Chain Recovery Strategies

Amidst the upheaval, there is a tremendous positive momentum amongst supply chain executives in wanting to embrace digital technologies to achieve the recovery targets, and plan for resurgence and sustainable long-term strategies. And as the pandemic shrinks the opportunity window, the time to digitalize is now!

In this whitepaper, we aim to build the foundational framework for what comprises digital supply chains and how they are different from traditional ones. This will help us explore the depths of digital supply chain technologies, emerging business models, and innovative offerings by solutions providers - both the incumbent IT solution providers and the tech startups - in our upcoming research. The details of the upcoming research can be found in the whitepaper.

 


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Namita Jain
Deputy Director, Research

Researching technology for actionable impact since my 12 years in tech strategy and advisory



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