RISK MANAGEMENT
the products to its customer ’ s assembly line in Japan , a move that cost in total more than US $ 5mn .”
Other ways in which organisations mitigated the challenges included increasing stock levels prior to , or in the early stages of COVID-19 to increase their resilience ( 22.6 per cent ). “ It is likely that companies with a robust supply chain risk management system in place were able to react faster to the unfolding pandemic in the early months of 2020 , giving them a time advantage to either secure more critical supplies or ensure logistics capacity amid rapidly decreasing options ,” comments DHL Resilience360 ( now Everstream Analytics ).
In addition to these core ways organisations navigated COVID-19 , a low percentage all used a combination of alternative transportations ( 15.4 per cent ) or ocean services instead of air ( 7.7 per cent ), DHL Resilience360 ( now Everstream Analytics ) comments that this illustrates “ that in an uncertain environment that makes scenario planning difficult , most companies opted for more expensive yet reliable options , such as air cargo , and increased buffer stock .”
Shifts in manufacturing as a result of COVID-19 If COVID-19 has identified one thing in the industry , it is the extent that companies are contemplating the need to diversify their supply chain locations to reduce their reliance on a single country such as China for its manufacturing facilities . “ At the height of the crisis , the COVID-19 pandemic exposed the severe vulnerabilities that global manufacturers faced as companies scrambled to identify affected suppliers and keep their supply chains moving ,” says DHL Resilience360 ( now Everstream Analytics ).
When it comes to having a sourcing and manufacturing presence , DHL Resilience360 ( now Everstream Analytics ) details that it comes at no surprise that China ( 57.1 per cent ) was the top choice for manufacturers as a single significant presence , followed by the European Union ( 52.9 per cent ), United States ( 51.2 per cent ), Mexico ( 27.6 per cent ), and India ( 25.9 per cent ).
While key risk mitigation factors driving production away from countries like China range from lower labor costs to sourcing diversification , the jury is still out on whether “ a mass exodus of global supply chain uprooting out of China ,” will happen , DHL Resilience360 ( now Everstream Analytics ) comments that it is “ unlikely for several reasons .”
While it may seem an enticing prospect , “ companies will need to evaluate various factors from a supply chain and operational standpoint : lack of sufficient access to mature manufacturing facilities ; warehousing availability ; reliability of air , ocean , and ground infrastructure
120 June 2021