As any industry professional can tell you, the global pandemic has put supply chains — and all they have the power to do — in the spotlight. One of the latest outcomes is an initiative that has just been announced between Australia, India and Japan. The arrangement is specifically designed to establish greater supply chain resilience in trade and investment among the nations.
“Digitization of trade procedures is a very important step for facilitating trade and thereby maintaining resilience in supply chains,” says Indian Commerce and Industry Minister Piyush Goyal. “This was clearly exemplified during the COVID crisis when many of the regulatory agencies were not functioning physically.”
Goyal adds that the diversification of supply chain is critical for managing the risks associated with supply of inputs, such as price volatility. “We could provide the core pathway for linking value chains in the region by creating a network of reliable long-term supplies and appropriate capacities,” he explains.
The goal is to deliver a free, inclusive, transparent, predictable and stable trade and business environment. Trade officials have been directed to work out the details for launch later this year.
“The parties have also kept the arrangement open to other countries in the region, which share similar views,” writes Subhayan Chakraborty for Business Standard. “India has suggested that greater convergence in market oriented policies, demography, growth potential, fiscal state of play including existing debt burdens and geo-political strategy may be adopted.”
The changing landscape of supply chain risk
Supply chain resilience absolutely involves multi-stakeholder collaboration to raise standards, educate users, achieve circular business models and more. According to a brand new briefing report by the Economist Intelligence Unit and commissioned by ASCM, supply chains must collaborate beyond one’s own supply chain to “recalibrate long, global supply chains to reduce fragility and manage critical dependencies.”
The good news is that, even in the midst of a pandemic, supply chain organizations can begin fostering more modern, resilient networks. This can be done by focusing on sustainability and strengthening tactical capabilities in order to prepare for and respond to disruptions. A few additional strategies cited in the report include:
- Supply chain mapping: Mapping suppliers helps identify vulnerabilities and enables a quick response to disruptions.
- Risk management maturity: Mature organizations prepare for disruptions by updating business continuity plans and conducting regular scenario analysis to create greater understanding of vulnerabilities.
- Financial resilience: As many organizations have learned over the past few months, a fundamental aspect of resilience is the ability of company finances to absorb a shock.
- Long-term risk mitigation: Companies should expand their risk horizons and develop awareness of vulnerabilities and exposures.
- Ecosystem services: Assess the dependence of key suppliers on natural systems and resources, such as forests or groundwater, and understand their exposure to risks associated with environmental degradation.
The briefing report, “Supply chain resilience for an era of turbulence,” is based on a series of in-depth interviews with subject matter experts on supply chain resilience, sustainability and circularity. Given the current era of increased risk, it highlights that more focus is needed on how companies and industries can take effective steps to build resilience into their supply chains.
I invite you to learn more about this at ASCM CONNECT Virtual. During the educational session “Building Supply Chain Resilience in an Era of Turbulence,” Samantha Grenville from The Economist and I will discuss how to achieve a truly resilient network. You will gain real-world insights from ongoing research into supply chain resilience in the pharmaceutical, retail and consumer technology manufacturing sectors. Register here.
Then, the second phase of this research is a benchmarking framework that identifies best practices in both real-time and strategic supply chain resilience. It’s planned for release in early 2021. Begin the journey toward a truly resilient supply chain. Read the full briefing report and sign up to stay informed of updates and official benchmark release.