Fit vs Fragile? The winner: Adaptable Supply Chain Processes

In the discussion of fit vs fragile supply chain processes, the most adaptable to disruptions wins. Covid-19 is just one of the disruptions.

The COVID-19 pandemic and its impact on the global supply chain processes is undeniable. However, as we settle into a “new normal”, the world seems rather shortsighted in analysing the impact of the pandemic on the world economy.

Yes, the most successful companies to come out of the pandemic adapted fast and efficiently to the challenges at hand. Their management teams made the correct predictions for the next 1.5 meters ahead. But is this all? For the short-term, yes. However, looking in the distance, we see much more than that.

The Fragile Supply Chain Processes – Adaptable to the Short-Term

The Coronavirus pandemic demanded extreme adaptability of the supply chain processes. Teams made use of their best decision-making and efficient managerial skills to weather the storm.

However, a storm, no matter how violent, comes and goes. People are bracing for the impact, knowing that it will be over at some point and hoping that point will come quick. Then everything comes back to normal, the sea calms down, and the journey can continue in peace.

From this standpoint, the Coronavirus pandemic is not a storm, nor an earthquake, nor any kind of natural cataclysm. In point of fact, we’re not discussing “going back to normal”; we’re uttering the words “new normal”.

This “new normal” is anything but a calm sea. And if we put our glasses on, we will see the Coronavirus pandemic is merely a dot on a line, an allegro that has sped up an already unstable economic and political environment. The digitisation was already here. The rush for innovation had already begun, and it is now accelerating, giving rise to a very unstable global marketplace.

We will see many changes in the following years, and they will come in a very staccato rhythm. So, probably the most significant long-term lesson we get to learn from the Coronavirus pandemic is that adaptability-to-change is more beneficial than efficiency.

Disruption has become a trend that will repeat itself as the world’s global power balance shifts, and we are faced with climate change. Supply chains will feel these disruptions to their core, and they must be able to deal with them.

This “new normal” we see as we’re resurfacing from the Coronavirus pandemic has parted global supply chain processes into two camps: the fragile and the fit. It is quite a Darwinian split.

Fragile supply chains focus only on the specific disruption at hand, rushing to solve operational challenges such as supply shortages or demand shifts and losing sight of their long term goals and strategy. Fragile supply chains fail to see how any structural changes could pose an opportunity in the long term and usually prioritise current-year performance over long-term projections.

A Fit Supply Chain will Maintain a Long-Term Vision

The supply chain leaders who have understood that disruptions are here to stay have the potential of building a more adaptable and flexible supply chain.

Fit supply chains can withstand any structural disruption and turn it into a competitive advantage. Strategic investments are not discontinued at the very little sign of turmoil; the proverbial cost-cutting is handled with great care.

Companies with fit supply chains can change their organisational design in such a way that it allows them to create value out of disruption. Cost-optimisation is a fluid endeavour and an ongoing effort that might happen at all ends of the supply chain.

Companies have clearly sensed these changes, and surveys show that a large majority of supply chain professionals are looking to invest in resilience and agility.

However, when things get rough, there is one thing that matters the most – adaptability- the capacity to bend with the times and find opportunity in every difficult disruption.

It is accurate, and we have already discussed this in previous articles. Some companies do not have the same might and scale for innovation, AI or supply high-priority as the big “whales” out there.

It is much more challenging to build flexibility and adaptability if you are an SME. AI solutions are too expensive and not viable. You need relations, connections, the right people in the right places.

“Survival of the fittest” is not “survival of the strongest”

Professor Leon C. Megginson stated, in a 1963 class at Louisiana State University, that “according to Darwin (…), it is not the most intellectual of the species that survives; it is not the strongest that survives, but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself”.

So, how do you adapt? How do you switch from one way of doing things to another? You need flexibility and visibility. You need to see the bigger picture, understand every incoming disruption and the real damage that it can do, and bend so you don’t break in the storm.

So, visibility, data, connections – all of these can be of human nature and cost-effective.

The solution is very simple – on-site local professionals collecting and validating data from the suppliers, assessing issues, helping you make fact-based decisions at all times.

These professionals speak the same language, living and working on-site, on a specific location, ready to intervene when needed. Over time, they will develop solid interpersonal relations with your providers and partners, which are crucial for weathering any supply shortage storms.

So, the solution is very straightforward, and you might have already thought about it but ditched it because it seems very hard to manage. Who takes responsibility for the work done by 10-20 local independent contractors working with you from all the corners of the globe? Who manages them? Is there a kind of service?

There is now, and we do it. We find, recruit, train and manage professional independent contractors globally, coordinating with global teams working on every end of the supply chain. We help develop a workflow, do business development or consulting when needed, and also execute.

It’s an all-around full-service that can solve your adaptability and resilience issues. Survival of the fittest? Actually, survival of the most adaptable.