Depleting inventories: Learning to safeguard the supply

Accenture’s MD for the Energy Industry Group in the Middle East discusses how global restrictions due to the COVID-19 pandemic have seen inventories deplete and why it is important to safeguard the supply chain

By: Paul Carthy, Managing Director, Energy Industry Group, Accenture in the Middle East

The supply chain has always been an essential lifeline for people, getting goods and services to all types of customers everywhere quickly, safely, and securely. Never has this been truer than in the current unprecedented times of global restrictions due to the COVID-19 pandemic. Companies worldwide have a shared responsibility to safeguard and ensure a smooth and reliable supply chain in all its forms, primarily via e-commerce.

Even as millions are still quarantined or self-isolated, a significant increase in online purchases left businesses scrambling to ensure the resilience of their supply chains. Unfortunately, the reality is that most companies were unprepared for a global pandemic of this nature. With labour shortages and reduced productivity challenges cropping up across the entire value chain, the supply chain’s ability to deliver has taken a severe hit across the world, specifically across the following touchpoints:

  • Suppliers face challenges in distributing products and commodities due to quarantine and trade restrictions, while consumers are concerned about the traceability and source-country of the products.
  • Manufacturers have factories in quarantine, with some production plants shut down or facing challenges due to the lack of availability of raw materials.
  • Logistics providers are dealing with travel restrictions and market closures. At the same time, carriers face a shortage of drivers or a limitation in the number of driver hours.
  • At the end of the chain, sales teams are dealing with shifting demand as consumers move to online platforms away from physical stores and are prioritising ‘need’ versus ‘want’ purchases that lead to depleting inventories.

We have identified seven priorities for companies as they repurpose their supply chains to increase both resilience and responsibility:

  • Preserve the extended workforce. Promote the health and wellbeing of supply chain workers, supporting their mental health and emotional and physical needs as well as their physical safety.
  • Repurpose your capabilities. Look for ways to repurpose supply chains to help societies manage the urgent challenges of COVID-19.
  • Think local. Think creatively about how to reallocate resources to support local communities across the whole supply chain.
  • Secure the supply base. Strengthen the security of supply networks to enhance overall resilience and help any areas of the supply base at risk from operational and/or financial disruption.
  • Respond with confidence and insight. Use analytics, automation, digital platforms and digital twins to model disruption and test out potential responses.
  • Learn and evolve. Capitalise on this once-in-a-generation opportunity to identify points of supply chain failure, their root causes, and how they can be strengthened.
  • Reshape for the future. Keep planning for the investments needed once this crisis passes and economies rebound, while building in the purposeful and responsible features developed during the pandemic.

This is a time of unprecedented supply chain disruption. By stepping up and building purpose and responsibility into supply chains, companies will strengthen the business over the long term, and build the greater resilience and customer-centricity that will be vital to growth as economies rebound.

This column first appeared in the June issue of Pipeline Magazine

Source: Pipeline ME