THE NEXT NORMAL: FORTIFYING SUPPLY CHAINS POST-PANDEMIC

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New research from McKinsey Global Institute suggests that a significant supply chain disruption can cause a company to lose an entire year’s profit.

Despite these metrics, 54% of executives said they don’t have clear visibility into their supply chains. With the COVID-19 pandemic fresh in their minds and the threat of disruption higher than ever, an overwhelming 93% reported that they plan to take steps to make their supply chains more resilient.

Across industries, supply-chain resiliency, or the ability of a supply chain to bounce back from a large disruption, has risen to the top of leadership’s priority list. Company executives are now looking for ways to more deeply understand their supply chains, increasing resilience and shifting strategies from “just-in-time” to a more robust management approach.

Here are some ways companies are reimagining supply chains and increasing resilience:

EXPECTING AND MANAGING DISRUPTION: THINK HOLISTICALLY

Supply chains are typically made up of a complex network of suppliers, and these suppliers are not isolated. When even one aspect of a supply chain is exposed to risk, all parts are vulnerable to disruption. Therefore, increasing supply chain resilience begins with remembering that risks are interconnected along your supply chain and across your business. To manage potential disruptions, you should begin by thinking holistically about the risks and challenges your supply chain may face.

To understand potential vulnerabilities, it is imperative to track a wide spectrum of risks. Pulling data from internal sources, external bodies, and even social media could be beneficial to spot trends that can isolate opportunities for greater efficiencies by reducing costs and responding more quickly to disruptions like protests over labor rights, government instability, or even security risks.

CENTRALIZE RISK MONITORING & CREATE TARGETED SOLUTIONS

Next, re-frame your view of risk as a negative component in your business equation. Instead, view risk management as a strategic component that, with effective management, can lead to opportunities for both your supply chain and your business as a whole.

Once you determine what the true risks to your supply chain are, transform processes to manage and mitigate those risks. Implement a strategy that is tailored to the specific risks in your supply chain instead of a “one-size-fits-all” solution. Your supply chain is a unique and dynamic environment with its own needs and risks and the most cost-effective risk management strategy will be one that applies targeted solutions to these specific risks.

Most importantly, remember that you should constantly be innovating both internally and jointly with your suppliers. Leverage data not just to gauge the likelihood of future interruptions, but also to diagnose new challenges to your supply chain.

STAY NIMBLE BY INCREASING FLEXIBILITY

Developing and implementing contingency plans allows your supply chain to withstand significant disruptions and better respond to fluctuations in demand.  Therefore, it is important to review supply chain processes for areas that may benefit from increased flexibility. These areas might include:

Adopting standardized tracking processes. Tracking products throughout your supply chain can improve stock management and make it less likely that products will be lost.

Identifying alternative suppliers for core products. In the event of a disruption, having a contingency supplier in place with the capability to manufacture core products will mitigate disturbances.

Prioritizing supplier relationships. A company with a poor supplier relationship will be less knowledgeable about its partners and less likely to be forewarned about supply problems; therefore, communication with suppliers is key to flexibility.


While unforeseen disruptions can create shortages and delays, contingency plans and risk management tools can help companies bounce back from these disturbances more effectively and, at times, even ahead of their competitors. Therefore, building a resilient supply chain is not only critical for continued successful operations, it is paramount for increasing competitiveness.

New research from McKinsey Global Institute suggests that a significant supply chain disruption can cause a company to lose an entire year’s profit.

Despite these metrics, 54% of executives said they don’t have clear visibility into their supply chains. With the COVID-19 pandemic fresh in their minds and the threat of disruption higher than ever, an overwhelming 93% reported that they plan to take steps to make their supply chains more resilient.

Across industries, supply-chain resiliency, or the ability of a supply chain to bounce back from a large disruption, has risen to the top of leadership’s priority list. Company executives are now looking for ways to more deeply understand their supply chains, increasing resilience and shifting strategies from “just-in-time” to a more robust management approach.

Here are some ways companies are reimagining supply chains and increasing resilience:

EXPECTING AND MANAGING DISRUPTION: THINK HOLISTICALLY

Supply chains are typically made up of a complex network of suppliers, and these suppliers are not isolated. When even one aspect of a supply chain is exposed to risk, all parts are vulnerable to disruption. Therefore, increasing supply chain resilience begins with remembering that risks are interconnected along your supply chain and across your business. To manage potential disruptions, you should begin by thinking holistically about the risks and challenges your supply chain may face.

To understand potential vulnerabilities, it is imperative to track a wide spectrum of risks. Pulling data from internal sources, external bodies, and even social media could be beneficial to spot trends that can isolate opportunities for greater efficiencies by reducing costs and responding more quickly to disruptions like protests over labor rights, government instability, or even security risks.

CENTRALIZE RISK MONITORING & CREATE TARGETED SOLUTIONS

Next, re-frame your view of risk as a negative component in your business equation. Instead, view risk management as a strategic component that, with effective management, can lead to opportunities for both your supply chain and your business as a whole.

Once you determine what the true risks to your supply chain are, transform processes to manage and mitigate those risks. Implement a strategy that is tailored to the specific risks in your supply chain instead of a “one-size-fits-all” solution. Your supply chain is a unique and dynamic environment with its own needs and risks and the most cost-effective risk management strategy will be one that applies targeted solutions to these specific risks.

Most importantly, remember that you should constantly be innovating both internally and jointly with your suppliers. Leverage data not just to gauge the likelihood of future interruptions, but also to diagnose new challenges to your supply chain.

STAY NIMBLE BY INCREASING FLEXIBILITY

Developing and implementing contingency plans allows your supply chain to withstand significant disruptions and better respond to fluctuations in demand.  Therefore, it is important to review supply chain processes for areas that may benefit from increased flexibility. These areas might include:

Adopting standardized tracking processes. Tracking products throughout your supply chain can improve stock management and make it less likely that products will be lost.

Identifying alternative suppliers for core products. In the event of a disruption, having a contingency supplier in place with the capability to manufacture core products will mitigate disturbances.

Prioritizing supplier relationships. A company with a poor supplier relationship will be less knowledgeable about its partners and less likely to be forewarned about supply problems; therefore, communication with suppliers is key to flexibility.


While unforeseen disruptions can create shortages and delays, contingency plans and risk management tools can help companies bounce back from these disturbances more effectively and, at times, even ahead of their competitors. Therefore, building a resilient supply chain is not only critical for continued successful operations, it is paramount for increasing competitiveness.

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