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Supply Chains Animated Short

Global economic interconnectivity has resulted in a gradual levelling of the playing field for emerging markets and will help the world address urgent crises in the years to come. Governments can support firms in meeting today's critical challenges by improving supply chain infrastructure and encouraging diverse supplier networks, which provide the adaptability firms need to meet evolving consumer demands, mitigate risks, and incorporate themselves into international value chains. Moreover, countries deeply entwined in global trade networks recover far more quickly from economic shocks, granting economic stability as the world faces changing climate-related catastrophes and growing needs for ingenuity and interdependence.

Watch the CLDP Short below to learn how supply chains can be strengthened to meet today's critical challenges. 

  • Supply chains are the lifeline of the global marketplace, linking the steps of production of goods from resource extraction to end consumption. In large part, we can thank them for the growth and development of our ever more connected and globalized world.    

    The COVID-19 pandemic exposed significant vulnerabilities in the global supply chain. With nationwide lockdowns, bottlenecks at ports of entry, and factory closures, firms have scrambled to find alternative centers for production and sourcing.  

    While the COVID-19 may be a once-in-a-lifetime pandemic, supply chain disruptions are nothing new. From geopolitical events to resource scarcity, and natural disasters, many scenarios can introduce risk —and destabilize— global supply chains. With so many variables at play, it is imperative to develop adaptive strategies and implement safeguards to ensure supply chain resilience. 

    A resilient supply chain is defined by its capacity for resistance and recovery. That means having the capability to endure, mitigate, or even prevent the impact of a supply chain disruption. However, since some disruptions are unavoidable, implementing adaptable responses is key to ensuring continued operations.  

    Here are three main strategies for bolstering supply chains:  

    First, build redundancy into your supply chain. For every Plan A, have a Plan B, Plan C, and even Plan D in place so that you’re never caught off guard. Buffers that account for micro disruptions, like employees calling out sick or equipment failures, should always factor into supply chain resilience planning. In addition, designing standardized procedures that seamlessly onboard new employees and establish response plans in emergency decision-making bolster supply chain resiliency.  

    Second, diversify your manufacturing network by adding new and backup suppliers in varied locations to your existing network. This will ensure continued operations in the event of regional lock downs, natural disasters, or geopolitical events that would otherwise cause disruptions. Consider multi-sourcing (the practice of partnering with multiple suppliers), nearshoring (moving business operations to locations that are geographically closer), and even re-shoring (relocating manufacturing operations to the home country). 

    Third, maintain consistent communication with supply chain partners and train employees how to react to disruptive events. Implementing various stress tests to your supply chain strategy will expose potential vulnerabilities and allow you to maintain balance between costs and risks. Above all, always remain flexible—you will likely need to continue adjusting your supply chain management plans to adapt to evolving disruptions.  

    Investing in supply chain resilience creates worthwhile returns by allowing manufacturers to operate more efficiently, improve productivity, and mitigate risk, all of which make businesses more competitive and able to adapt to supply chain disruptions.