RETHINKING
THE GLOBAL SUPPLY CHAIN
Manufacturers should use the post-COVID world as a chance
to improve resilience in their supply chains
BY MIKE BRISTOW, MD OF MANUFACTURING LOGISTICS, DHL SUPPLY CHAIN UKI
The impact of COVID-19 on
manufacturing is well documented, and
the automotive sector in particular has
suffered from the shutdowns across the
globe. According to the latest SMMT
production figures, the number of cars
built in the UK over the past six months fell to
the lowest since 1954, highlighting the difficulties
faced by those in the industry.
That said, this has not been a blanket
reduction across other areas of the UK
manufacturing economy. Some parts of the
sector have been quick to bounce back with
strong order books and back up to producing
broadly in line with original targets, albeit under
social distancing restrictions with a key focus on
maximising cashflow.
Although the UK manufacturing sector
has been significantly hit as a result of the
pandemic, we have also witnessed first-hand
some significant innovations emerge, and some
important evaluations of the supply chain taking
place. A recent McKinsey survey of supply-chain
leaders found that about 93% of respondents
planned to increase the level of resilience across
their supply chain as a result of the pandemic,
and they intend to do that using a variety of
mechanisms, including dual sourcing of raw
materials, increasing their
inventories of critical products
and near-shoring, dualsourcing,
or regionalising their
supply chains.
At DHL Supply Chain, we
are working through a program
of ‘Restart, Redesign, Reinvent’
activity with customers.
Part of this has been helping
manufacturers to understand
where and how improvements
can be made to their supply
chain to drive resilience.
There are a number of key
trends that we have identified
that will now shape the
direction of travel.
The first of these is very
much in line with McKinsey’s
research, and identifies the
need to shorten the supply
chain with regional strategies,
while ensuring the focus on
finished goods remains global.
In practice, this means we’re
working with customers on a
number of areas. To help inform
SUPPLY CHAINS SEPTEMBER 2020
the supply chain strategy, we
see customers drawing on big
data for insights into supplier
risk, enabling them to see
the fullest picture of where
any weak points lie. These
insights can then be used to
redesign the supply chain to
limit exposure and mitigate
global risks, and in some cases
to streamline the number of
players involved to simplify the
supply chain. Finally, visibility
and integration will play a key
role in maintaining the integrity
of the supply chain in the future
with a more acute focus on
resilience.
The second trend we are
93%
of supply chain
managers plan to
increase resilience
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