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Rebalancing supply chains for an agile, resilient and sustainable future

Ultimately, supply chains are a complex balancing act. Each organisation is constantly weighing up shifting push and pull factors when considering where to source and how to move their products.

Adjusting a supply chain is no easy task and moving production can be hampered by quality, cost and speed issues. Image credit: Maersk

Adjusting a supply chain is no easy task and moving production can be hampered by quality, cost and speed issues. Image credit: Maersk

What we are currently experiencing is an accelerated need to re-appraise and adjust those calculations, brought forward and boosted by COVID-19. Already ongoing trends in shifting production centres are now a priority for many looking to enhance resilience.

Investment into, and focus on, visibility has stepped up as boards zero in on how important it can be to deal with disruption and cut costs. New transport links are being studied and tested. Similarly, sustainability has risen up agendas, as companies with sustainable footings have been better placed to weather the storms.

However, adjusting a supply chain is no easy task and moving production can be hampered by quality, cost, and speed issues, with finding a new supplier and linking them into a global logistics train frequently challenging. Furthermore, the overall costs within a supply chain, both monetary and in terms of emissions, are not always clear and have to be balanced with the speed of getting goods to market.

Supply chain managers therefore need to focus on getting a top-down, integrated view of their supply chain, its associated costs and its potential weak spots as a matter of utmost urgency. Rather than undertaking a knee-jerk reaction as a result of the twists and turns of 2020, organisations need to gather the data, work with their suppliers and consider the complete supply chain to understand their next move.

This is especially so if they cannot move production closer to their end market and rely on long-distance supply chains to remain cost-effective and competitive and so need to understand what is happening within supply chains as early as possible. For many though, the next step will involve shortening the distance between their factors of production or final assembly and their destination in order to achieve resilience, to adjust rapidly to changing market conditions and to handle increasing calls for openness and sustainability in supply chains.

These calls for greener supply chains come from both within organisations, from government and, increasingly from consumers. As brands become increasingly conscious of sustainability in relation to their supply chains, this is a factor that should be considered when it comes to sourcing strategies. The conscious consumer will continue to increase their demands for sustainable fashion and with so much choice in this market it is a risk for a business to leave sustainability at the bottom of the priority list.

It’s time to reconsider the supply chain. It’s time to move beyond pure cost. It’s time to think about how to balance our supply chain priorities. It’s time to structure them so they are sustainable and resilient not just against small changes, but so they can withstand and thrive for the next 20 or 30 years.

For more information on this white paper, visit the Maersk website.