Coronavirus / Covid 19

Andreas Mühlbauer,

Securing future-proof supply chains

In the course of the coronavirus pandemic, the heavy dependence on suppliers from China and other weaknesses in existing supply chains have come to light. The supply chain specialist BluJay Solutions provides tips on how these can be mitigated.

Supply chains must become more flexible in order to be able to absorb short-term disruptions. © Getty Images

There were supply chain disruptions before Covid-19 and there will be after. Logistics companies can rarely influence the causes themselves. Trade conflicts such as the one between the USA and China, natural disasters or an overload of technical infrastructure can trigger far-reaching economic upheavals - and often with very short warning times. No company can protect itself against all of these eventualities at the same time. What logistics managers can do, however, is to build supply chains that are better able to withstand such disruptions.

The coronavirus crisis has revealed the extent to which companies around the world are dependent on suppliers from China - to the point where production is shut down due to a lack of purchased parts. How this dependency can be reduced in the future cannot be answered with certainty in the current situation, but initial solution scenarios are emerging.

As a result of the tariff dispute between the USA and China, Apple already had a review carried out last fall on how 15 to 30 percent of its production capacity could be relocated from China to other countries in Southeast Asia. It can also pay off for other companies to no longer rely solely on the "China workbench", but to include alternative suppliers in countries such as Vietnam, Indonesia or India in the supply chain.

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The second important measure is the establishment of "elastic" logistics: modern supply chains require a high degree of flexibility in order to cope with large-scale disruptions as well as fluctuations in consumer demand. Outdated transportation management solutions are proving to be a hindrance here, as their data is often available as an isolated silo and does not enable real-time transparency of transportation processes.

A crucial step in achieving an elastic supply chain is joining a network where comprehensive connectivity and mutual data exchange contribute to the common benefit of all members. The strength of such networks, in which manufacturing companies, LSPs and other transportation service providers are connected, lies in its ability to make processes within the supply chain transparent. In the event of disruptions, logistics managers recognize them immediately and can take countermeasures without losing time. At the same time, the system enables freight forwarders who have free freight capacities to offer these in the network as on-demand connections.

"Global transportation management platforms scale with changing requirements. Especially in highly dynamic situations like the current one, they help to mitigate disruptions in your own supply chain," explains Siegfried Mänzel, Managing Director at BluJay Solutions. "Now more than ever, companies need agility built into their systems to scale business operations, accommodate changes in inventory and adapt to new consumer buying patterns."

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