Creating an Unbreakable Chain
help ensure it
When COVID-19 began spreading
throughout the world, it rapidly wreaked
havoc on global supply chains. Factories
closed, workers were sent home, and
transportation was severely impacted.
Many essential products suddenly
became dangerously scarce — ventilators,
N95 masks, medicines and eventually
food items like milk, meat, and eggs.
The pandemic created a crisis that few
industries were prepared to deal with.
But as with every crisis, lessons can be
learned and positive change can result
when the world recovers, said Paul Jan,
a noted supply chain consultant and
instructor for DCE’s Supply Chain
Management certificate program. One
piece of good news is that people are
finally learning the vital importance of
healthy supply chains, the lifeblood of
the world’s economies.
“Before the pandemic, people would ask
what I did for a living, and when I told
them I was a supply chain consultant,
they’d just get this blank look on their
face,” he said, laughing. “It has always
been a process nobody really understood
or paid attention to. Now everybody is
well aware of how important it is. The
pandemic has focused a lot of attention
on this process which people used to
take for granted.”
It was especially significant that the
pandemic started in China, a manufacturing
and export giant. Supply chains
around the world were impacted in a
short period of time.
“Factories in China always shut down
for about a month during Chinese New
Year, and companies take this into
consideration and buffer up during
this period,” Jan said. “What happened
this year, though, is the shutdown
was prolonged for an indefinite period
because of COVID-19. Suddenly, cross-border
and cross-continent delivery
chains that were reliable were breaking.
And there were no plans or resources in
place to mitigate the damage. It wasn’t
until mid-to-late March that China began
to open up again.”
As the virus spread throughout China,
Europe, India and the rest of the world,
many supply chains slowed to a halt,
including in the U.S., partly due to overreliance
on the Just-In-Time inventory
management strategy, but more importantly
due to the lack of end-to-end
supply chain visibility. JIT simply means
that production begins when orders
are placed and inventory stock is only
delivered as needed, a strategy that
saves on warehousing and inventory
costs but falls apart when materials and
finished goods cannot arrive in a timely
“With JIT, if one link in the chain is
broken, the entire system could break
down,” Jan said. “However with lack of
visibility, or lack of ‘control tower,’ no
one knows when, how, and how much inventory is available. Personal protective equipment (PPE) is a great example, where states were fighting other states and the federal government to get PPE. There was no visibility. Everyone was in the dark on who has what, who has capacity and how much — not just PPE but automotive, medicine, and consumer goods like Apple products.”
COVID-19 exposed serious flaws in supply-chain management, flaws that hopefully will result in much-needed improvements to prevent and mitigate future disruption. And the rise of artificial intelligence and machine learning can play a major role in creating more reliable, flexible, and autonomous management.
“This is essential even short of a global crisis,” Jan said. “Smaller-scale disruptions such as rail shut-downs, natural disasters, strikes at loading docks and harbors and such can create gaps in supply chains.”
A smart supply chain
Though not infallible, AI and ML can enable an autonomous system to forecast and more accurately predict demand, allow for a quicker response to potential disruption and, perhaps most importantly, take human error and bias out of play, freeing up time for workers to plan and mitigate potential risks, not simply crunch numbers, Jan said.
“This is key, to pivot supply chain planning to be more agile and flexible. AI and ML can use algorithms and models and data to help mitigate sudden disruptions. This enables people to be proactive vs. reactive to potential disruptions.”
The technology can be invaluable in preparing for possible disruptions, by allocating resources to ensure a responsive supply chain system. But there are some factors that AI and ML can’t predict, like hoarding patterns. Who could have foreseen the run on toilet paper at the onset of the pandemic, for instance?
“This technology can help move supply chain management away from managing by dashboard to real-time monitoring and identifying potential disruptions,” Jan said. “Data sets are big now and there’s no human brain that can really process it all. Machine learning can comb data for us and identify potential risk in real-time. This will allow us to integrate risk awareness into the product and value chain, allowing us time to mitigate and plan.”
A more flexible future
The DCE Supply Chain Management certificate program provides in-depth understanding of how end-to-end supply chain works, from raw materials to the Amazon package arriving on your doorstep. It examines how each element in the chain relates to one another, with an eye to creating a more sustainable and flexible system.
“Creating a more flexible supply chain was a given even without the pandemic,” Jan said. “AI and ML and other economic and geo-political factors were pushing us toward a more flexible model before the crisis. The COVID-19 disruption just expedited this need.”
Jan points to a MIT Scale Network study that found even many large companies were unable to create contingency rules and procedures for operations during a complex, high-risk event.
“In fact, approximately 60% of the surveyed managers either do not actively work on supply chain risk management or do not consider their company’s risk management practices effective,” Jan said. “Cisco, Coca-Cola, Whirlpool are the exceptions where they have spent years working out risk management processes due to failures in the past.”
Designed for service and manufacturing professionals seeking to improve the effectiveness of their supply chain, the online DCE program addresses the latest advances and strategies in managing this crucial lifeline. It prepares participants to optimize company supply chains to guard against disruptions — a threat to company profitability as well as national and global economies.
“Supply chain is a cool career,” Jan said. “Even more so now that everyone knows what it is.”
Learn more about the Supply Chain Management Certificate Program.