Now that the Christmas shopping season is in full swing, retailers are experiencing their busiest time of the year. With inflation expected to continue to affect holiday spending, and 24% of businesses reporting inflation as their second biggest worry, logistics companies don’t expect a significant surge in demand during the peak season.
While overall supply chain disruptions are stabilising, another threat to the supply chain is becoming a growing concern – labour disruptions, writes Bindiya Vakil, CEO, Resilinc.
Holiday season forecasts are not making retailers merry
Latest data reveals a staggering 103% year-on-year increase in labour disruptions. According to a recent survey, 54% of supply chain professionals at retailers expect extended shipping times due to labour shortages, with an equal number expressing concerns about the possibility of at least one of their suppliers facing shutdowns during this Christmas season.
Consequently, retailers have been actively seeking new suppliers or sourcing regions to mitigate the impact of potential disruption, as 65% of respondents recently admitted. Another concern throughout the entire supply chain is the threat of strike action looming over transportation centres, as it could lead to higher shipping costs, shortages in inputs, and longer lead times for deliveries.
As businesses navigate through these challenges, resilience and strategic planning are vital to safeguard the continuity of the supply chain amid the holiday season. And while avoiding disruption altogether remains impossible, there are proven strategies and solutions that companies can put in place to mitigate disruption, minimise impact, strengthen their supply chains, and ensure on-time delivery.
Building resilient supply chains through mapping and monitoring
A necessary first step for businesses in fortifying supply chains against potential labor and other disruptions is to gain a thorough understanding of their entire supply network. To do so, organisations need to map out their supply chains beyond high-volume, first-tier suppliers – especially given that as much as 85% of disruption occurs in the indirect sub-tier supply chain. Having full visibility and knowledge of all links in the supply chain is key to finding alternative solutions in the event of delays or shortages.
What also enables businesses to react swiftly is a real-time insight into events potentially threatening their supply networks. Having mapped the supply chain, it becomes essential to invest in monitoring tools that provide continuous 24×7 screening of potential threats. This type of monitoring, powered by predictive analytics capabilities, plays a crucial role in elevating mitigation efforts and responding promptly to disruptions as they unfold.
But the real game changer in building resilient supply chains and managing risk is artificial intelligence.
Leveraging AI for real-time visibility
New technologies bring unparalleled opportunities for supply chain risk management. Through advanced algorithms and predictive analytics, AI not only identifies potential risks but also enhances the ability to anticipate and proactively address emerging issues. For instance, Resilinc’s supply chain monitoring platform EventWatchAI, equipped with an advanced scenario planning feature, issues alerts almost daily on labor violations and other disruptions impacting suppliers across the globe.
Using the latest AI technology, supply chains can be mapped and monitored with unmatched precision and in real-time, giving companies the upper hand, particularly during the busy peak season. Combined with strong supplier relationships and actionable data, technology is one of the cornerstones of a robust supply chain strategy.
Holiday-ready supply chains
The peak season is both the most profitable and most challenging time of the year for retailers and their suppliers. As companies look to capitalise on increased demand, it becomes mission-critical to prepare supply chains and ensure on-time delivery amid the busiest shopping season. The only way to do so is by enhancing supply chain visibility through mapping and monitoring, maintaining strong supplier relationships, and leveraging advanced AI solutions, to stay one step ahead of disruption.
About the Author
Bindiya Vakil is the CEO and founder of Resilinc and is an award-winning expert in supply chain risk management. Crowned Supply & Demand Chain Executive’s inaugural Woman of the Year in 2020, Bindiya’s career spans 20 years. She holds a master’s degree in supply chain management from MIT and an MBA in Finance. Bindiya continues to lead the market in risk intelligence and mitigation and is credited with bringing supply chain risk management into the mainstream.