“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean
We entered 2020 with the disruptive winds of a global pandemic that resulted in significant financial losses and a decline in value for many companies globally. On the eve of 2024, it seems those disruptive winds are still blowing uncertainty in supply chains – be it worries of economic downturns, long-drawn wars, or the headwinds of trade tensions.
Asia’s Role
According to an article published by the
International Monetary Fund, Asia will contribute about 70% of the global growth in 2023. While 50% of that growth will come from China, other fast-growing Asian economies, such as India and Southeast Asia, are also contributing more significantly.
Trade integration is also deepening within Asia (article published by the
Asian Development Bank) driven by cooperation between various countries and trading blocs.
With its diverse, complementary, and interlinked ecosystem of mutual trade interests, Asia is a prominent player in the supply chain arena. Its “critical role” as the world’s manufacturing and trade hub also puts Asia at the epicenter of today’s cluster of disruptions.
Navigating Supply Chain Risks
Countries and companies alike are becoming increasingly aware of the supply chain risks these disruptions introduce. They are also taking steps to identify such risks early and mitigate them effectively.
- The United States launched the Indo-Pacific Economic Framework for Prosperity (IPEF) along with a dozen Asian countries (including Australia, India, Japan, and Southeast Asia) with a focus on the resilience of supply chain pillars. One of their key initiatives is to establish an early warning system, mapping critical mineral supply chains, improving traceability in key sectors, and coordinating on diversification efforts.
- Within leading companies, “Improved Visibility” is top of mind for supply chain leaders. It is also one of their top three supply chain risk improvement areas according to Gartner.
- IDC predicts that by 2024, 40% of Asian-based supply chain organizations will rebalance resiliency efforts to reflect the realities of inflation and necessary efficiency to recover 2 percentage points of margin. Visibility is key to guiding such efforts.
- For many companies, supply chains generate the bulk of their greenhouse gas (GHG) emissions. Enhanced visibility can help companies act on their supply chain emissions, for example, ethical sourcing, energy efficient production and carbon footprint aware transportation planning etc. Ultimately, this would help them be more sustainable and achieve their net-zero targets.
Control Tower to Nerve Center
The Jimmy Dean quote is a powerful reminder that we may not always be able to control our circumstances, but we can control our response and approach. For instance, the response during the pandemic to supply chain issues was reactionary to create some form of supply chain control tower. These continue to evolve in concept today, though many are often criticized for being visual aids of news.
The
Supply Chain Nerve Center offering, powered by industry-leading technologies, takes the control tower to the next level and beyond a visualization tool to an analytics-driven, decision-support tool across supply chain functional domains.
- The Supply Chain Nerve Center features 30+ industry use cases, assets, accelerators, assessments and is complimented by simulation software from Cosmo Tech (podcast on “Identifying Supply Chain Vulnerabilities”)
- It includes a supply chain resilience stress test, to identify potential points of failure, assess related financial exposures, and define appropriate mitigation strategies and actions
- Focused on being value-centric through cost optimization, enable revenue growth while reducing working capital
- Thanks to an open architecture and composable technology approach which leverages AI, customers can scale based on their needs. To enable real time intelligence and responsiveness, the offering integrates fully with SAP software giving purpose to data at scale across Design to Operate activities.
- With an initial focus on the consumer products, high-tech, industrial manufacturing and automotive industries, the Supply Chain Nerve Center is especially exciting for Asian markets like Australia, Japan, Southeast Asia, and India which are dominant in these industries
Nerve Center in the Asia-Pacific
Asia-Pacific is poised to benefit from a global push to diversify procurement, production and transportation of goods and services to reduce the risk of global supply chain disruptions. This global push, together with the rapid digitization and industrialization across the region is expected to open new growth avenues for the region.
Despite the disruptive winds, we are on the cusp of a new era, and SAP and Accenture are teaming up to allow regional organizations to navigate the winds of uncertainty by being able to adapt, adjust and rapidly address changes within their supply chains.
What did you think about this post? Please leave your feedback, thoughts, and suggestions in a comment below.
Also, please follow the co-authors:
Vanessa Molina,
pavneet.singh.bedi and
adam.peanna so that you do not miss any future posts.
You may also be interested in the following blogs:
