Now is the time to reassess the supply chain design for resiliency

The recent shutdown of Honda’s Swindon factory is yet another example of the nature of disruptions that have become the constant in managing global supply chains. There are a number of factors at play here – stockpiling of inventories as the production levels ramp up, the upcoming Chinese new year holidays and the scramble of getting supplies in before the Chinese production facilities close down for the holidays, as well as competition for the cargo capacity with the just completed Christmas/New year season. A combination of these factors created the perfect storm for the port congestions. The timing of Brexit is yet another big factor wherein checks at the ports and border crossings cause further delays.

Of course, the elephant in the room continues to be COVID-19. The new strain of COVID-19 when coupled with the snafus with the vaccine distribution continues to have outsized influence on the unpredictability in the global supply chains.

While it has become fashionable to blame the shortage on Just In Time production systems, what cannot be refuted is that the supply chains over the years have become longer. The time is now to reassess the supply chain design for resiliency. Building optionality into the supply base, parts availability, production facilities, and distribution modes will be pivotal for organisations to tackle disruptions.

 

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