Let me begin by saying “steady state” is an obsolete phrase. Corporate supply chains must be able to constantly adapt and evolve in order to survive and thrive in today’s fast-paced, dynamic environment. The frequency and impact of disruptions have grown exponentially over the last several decades, and are forcing companies into a state of continuous evolution.
Here are the top five disruptions responsible for the death of the steady state approach:
- Technology: Everything we do and how we do it is changing. New technologies are disrupting supply chain operations and delivering major value through increased efficiency, greater visibility and reduced costs. According to a recent survey by MHI, robotics and automation are leading the charge, with 65 percent of respondents recognizing these technologies as a source of disruption or competitive advantage.
- Weather and Natural Disasters: These unpredictable and sometimes unavoidable incidents can significantly disrupt supply chains. Extreme weather, followed by factory fires and explosions, were the most impactful event types in the first half of 2018, according to a report by Resilinc.
- Mergers & Acquisitions: Along with extreme weather and natural disasters, mergers and acquisitions were also one of the main sources of disruption during the first half of 2018. While these events have the potential to create huge transformation and reinvention, the lack of supply chain due diligence is all too common during mergers and acquisitions and can result in major disruptions to supply chain operations.
- Innovation: Like technology, disruptions in innovation continue to define best-in-class solutions and providers. Even practices and businesses that only a few years ago were considered world-leading can become obsolete if they are not constantly evolving and pushing the envelope.
- Bankruptcies: Due to the above four reasons, more and more companies are going bankrupt, causing a massive supply chain disruption. Suppliers going bankrupt can result in unpaid contracts and unfulfilled orders, while bankruptcies of major players can completely transform the marketplace.
The impact of these disruptions has resulted in a major design standard I like to refer to as, “Anti-Brittle.” These are supply chains that go beyond resilient, and are not only embracing change and uncertainty, but are harnessing these disruptions to spur innovation and realize increased performance. When uncertainty attacks, solutions must not be brittle, but Anti-Brittle to provide for ongoing success and the required continuous evolution.