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Resilience through difficult times is vital for the survival of these institutions, and when the global supply chain is disrupted, robust procurement services play a critical role in ensuring that they can continue to provide quality education to their students. While the pandemic is a unique situation, supply chain disruption can occur for a whole host of reasons, as has been demonstrated recently with the week-long blockage of the Suez Canal by a huge cargo ship, and businesses need to be completely prepared should such a situation arise, even after the pandemic is over.
China has been the world’s factory for decades, and a major distributor to the US, so when the biggest pandemic in history erupted from one of its main industrial regions, it sent shockwaves through global trade. At the start of 2020, the majority of factories in the country ceased production for several weeks, with many only slowly reopening at a reduced capacity. On top of this, uncertainty over border restrictions slowed international shipping, so even before western nations put lockdowns in place, the import routes were disrupted. Every area of global trade was impacted, and as the pandemic spread. By mid-2020, businesses across the world, including education institutions, were experiencing supply chain disruption at a never-before-seen level, especially those who had become reliant on international imports. Without being able to deliver their usual services, many have been forced to close their doors for good.
Some education institutions, however, have managed to weather the storm remarkably well, having put in place successful strategies to manage the supply chain disruption, and a large part of this can be attributed to their digital infrastructure. Older supply chain models and legacy systems involving the use of singular, cheap, overseas suppliers, have managed to save budgets in the past, but buckled under the pressure of the pandemic, leading to major shortages for many institutions. A more current approach, using advanced digital procurement systems to manage a diversified portfolio of suppliers, with regionalization of the supply chain and a focus on nearshore rather than offshore suppliers, gives far more flexibility and resilience, greatly mitigating the risk to the businesses.
Digital infrastructure provides resilience within the supply chain in several different ways. Predictive analysis, for instance, can mitigate risk, decrease costs and improve efficiency. This service can only be provided at scale by using machine learning, and businesses without this infrastructure have suffered during the pandemic as a result – predictive models have been able to inform companies on strategies to manage supply shortfalls and stockpile effectively. Without specialized predictive analysis, which takes into account past data and generates potential outcomes with corresponding likelihoods, any crisis preparation would be based on human estimation, so could either incur unnecessary costs or lead to a lack of preparation. Digital systems create the backbone for any organisation. They are far more accurate and can ultimately save significant amounts of time, money and resources.
Regionalization, since the pandemic started, has rapidly become the new approach within many industries. Globalization has dominated trade for the last few decades, but the pandemic has revealed great weaknesses in this system, and many are looking for alternative solutions. For a long time, businesses have been reliant on singular overseas suppliers, securing cheap supply deals, but with manufacturing bases like China being disrupted, and with uncertainty over shipping, it is clear that regional trade needs to become more self-sufficient. A regionalized model can involve onshore suppliers, who are within the same country, or nearshore suppliers, who are in neighbouring countries.
Regionalized supply chains, while possibly incurring greater costs, have many advantages besides mitigating risk. The environmental benefits are significant – why ship everything hundreds of miles across the ocean, pumping fumes into the atmosphere, when products are available from within the same country, or just over the border? Keeping production regional also allows for more direct management and rapid response times, and can ensure that more supplies are sourced from local, small-to-medium-sized supply firms as opposed to giant, overseas factories. By using local businesses, an education institution can go further in its mission to provide for its area. Digital systems will allow institutions to move away from reliance on an individual, large, overseas supplier and procure materials from a diverse portfolio of supply firms in real-time, with complex, predictive analytics, and complete, accurate information on the supply chain, including information about costs, delays, environmental impacts and any other relevant data.
Throughout the pandemic, education institutions have shown their commitment to providing quality services for their students despite the challenges thrown their way, and have gone out of their way to assist their local communities in a multitude of ways. By moving forward with advanced digital systems and more sustainable, regional procurement models, institutions can build resilience in the face of future crises, meet more ambitious environmental targets, create better relationships with local communities, and push ahead to thrive in the post-pandemic world.
In general here the emphasis is on predictive demand analytics and then regionalizing the supply chain – but regardless of the demand a decision to regionalise the supply chain means getting busy on some new suppliers, ones that can provide alternatives… and that means sourcing… bringing into the sourcing decision making such factors as distance… So you have your historic suppliers, the long list of folks you have bought from in the past – optimised on? Price perhaps? Now you need to relook at this list… you need to re-source, build other relationships, replace, is this also a time to bring into prominence supplier diversity?
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