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Strengthening supply chain resilience amid VUCA
Fri, 26th Nov 2021
FYI, this story is more than a year old

As Australia begins to emerge from lockdown, there are uncertainties ahead; on top of that, a potential third wave of the pandemic looms. As such, regardless of geography or sector, manufacturers continue to suffer from shortages of raw materials, intermediate parts, and other components, hindering the recovery of their downstream customers. Whether it's shipping and transportation bottlenecks or crippling ransomware attacks and labour shortages, shocks to supply chains now reverberate on a global level.

To cope with volatility, uncertainty, complexity and ambiguity (VUCA), supply-chain players can adopt three key actions:

1) Flexible production speeds responses

Three challenges most commonly facing manufacturers amid the pandemic are: customer demand, availability of materials, coupled with staffing and labour shortages, driven by changing consumer behaviour. But these challenges are also encountered in the industrial sector, where demand for petroleum, lumber, steel, and semiconductors fluctuates because of global lockdowns.

Flexible manufacturing and improved supplier integration are crucial to navigating this landscape. Suppliers should implement a single global manufacturing operations management (MOM) system to alleviate supply-chain snags. Rigid operating models should be redesigned with revised controls and responses that allow manufacturers to rapidly switch models and products. By harmonising operations, MOM helps industrial players effectively manage disruptions by alerting them to assembly-line changes, local training needs, and other issues.

Greater integration with suppliers is also essential, collaborating with engineering experts and contractors to develop preassembled modules instead of a box of loose parts. For example, a toy manufacturer with factories across Asia worked on new designs by sharing computer-aided design models and geometries in near real-time among their designers, engineers, suppliers, and marketers, partnering with their management teams to set up a collaborative internal digital platform. This resulted in a 30% reduction in data management and transaction times, speeding up turnaround and reducing costs.

2) Smarter staffing

Another major impact of the pandemic has been persistent staffing shortages. Many employers also face higher ratios of fewer industry-skilled employees, more staff in new and unfamiliar roles, and costly shift-scheduling difficulties.

Workforce enablement and labour-supporting technology are more important than ever. Data analytics can be deployed to better understand employee availability and skillsets, generating models to determine optimal resourcing for running complex equipment and processes at any given point in time. This streamlines tasks and improves productivity and worker satisfaction. Autonomous robots can also free up simple, manual tasks and help workers tap into colleagues from different markets for enhanced knowledge sharing and training while adhering to social-distancing measures.

3) Analytics assist materials shortages 

VUCA issues related to deviations in raw materials – such as the shortfall in semiconductor chips impacting automotive manufacturers – can be managed through data analytics applied in the form of product lifecycle management (PLM) software. Model predictive controls (MPC), AI, and even "chaos engineering" functions that simulate problems in production systems can all help manufacturers become more adaptative.

PLM is a sophisticated software platform that serves as an orchestration backbone of sorts. By using digital production definitions, worker management functions and advanced visualisations, users can connect their production and equipment lifecycles with a digital thread that enables control changes.

Future-proofing supply networks to bolster long-term resilience 

With change being the only constant, the onus is on supply-chain players to digitalise to counter VUCA and other impactful events. Building greater agility, resilience, and sustainability into supply-chain processes accelerates access to actionable information, allowing businesses to respond more effectively when challenges arise.