With the COVID-19 situation, supply chain interruptions will likely sort themselves out over the near future. However, technology managers of large enterprises must understand how to deal with future disruptions. Lenley Hensarling, Chief Strategy Officer, Aerospike shares four steps organizations can take to ensure the resiliency and flexibility of their technology supply chains.
Before the COVID-19 pandemic, it’s fair to say we lived in a magical realm where our supply chains were remarkably efficient, but not resilient. As consumers, we could purchase and ship whatever we wanted, whenever we wanted it, in just a few clicks. We thought these processes were unbreakable. Businesses also underinvested in the resiliency of the technology supply chains that underpin their products and services.Â
But risk â€” and supply chain risk in particular â€” are constant, even if they are not always visible. As early as March 2020, the Institute for Supply Management found nearly 75 percent of respondent organizations saw their supply chains disrupted by COVID-19 transportation restrictions. With the COVID-19 situation, supply chain interruptions will likely sort themselves out over the near future. However, technology managers of large enterprises must figure out how to deal with future disruptions.Â
Here are four steps organizations can take to ensure the resiliency and flexibility of their technology supply chains:
1. Squeeze the Maximum ROI From Existing Investments
Today, all organizations are being forced to look for efficiencies. Now is the time to ensure that businesses fully utilize existing investments, thereby maximizing return on investment. An abundant supply of availability in the cloud, for example, has often led to sloppy thinking.Â
IT managers said, in essence, â€œIt’s OK if it doesn’t scale well, we can just buy more compute.â€ That line of thinking won’t fly when budgets are being scrutinized. IT decision-makers should push for maximum value from their investments and scrutinize non-performing investments. Even in the public cloud, there is now a scarcity of certain instance types. You have to be flexible and make the right trade-offs in using resources to match where they will provide the greatest returns.Â
2. Utilize Managed Services
This crisis is different. It is not happening in just one location. Sourcing, hiring, and training qualified personnel to deal with complex IT issues are difficult â€” particularly when some locations are more locked down than others. Organizations need to focus on where they add unique value. Outsourcing management of technical infrastructure to a managed service provider can offload the task of finding and scheduling resources and the personnel to manage them.Â
Utilizing managed services increases the resiliency and predictability of cost for IT services. This shifts the risk to people and organizations who are better prepared to deal with it. Don’t be afraid to outsource key functions and responsibilities where appropriate. This can free up your resources to adapt or scale as appropriate.
3. Rethink Single-Source Supplies and Lean Manufacturing
It seems simple in hindsight, but single-source manufacturers and just-in-time or â€œleanâ€ manufacturing are quite risky. These strategies delivered efficiencies when global supply chains were working smoothly. But now there is increased risk and latency in that global model. COVID-19 has shown us a rare example of the â€œreal worldâ€ intruding on the â€œtech world.â€
4. Lengthen and Widen Business Continuity Plans
Before COVID-19, we thought disaster preparedness and business continuity plans meant taking one office or data center offline for a natural disaster or power outage. No longer. COVID-19 has shown us what happens for extended periods when offices in multiple geographic locations are impacted and in differing ways. Business leaders and IT managers should plan for future disruptions as lengthy and widespread as this one has been.Â
The Road Ahead
It’s no secret that the COVID-19 crisis is accelerating our expectations of technology. As consumers, we’re streaming more videos and games for personal use and are ordering more on e-commerce platforms to avoid non-essential travel. Enterprise video conferencing software use has similarly skyrocketed. Microsoft CEO Satya Nadella has said, â€œWe’ve seen two years of digital transformation in two months.â€ Expectations for uptime, availability, and scalability are all increasing in this new normal.
To meet and exceed these demands, investing in supply chain resiliency doesn’t just keep the business afloat. It adds value. Bain found that investments in supply chain resilienceOpens a new window can increase inventory turns 10-40 percent (thereby cutting costs and improving cash flow) and lead to a 20-30 percent bump in customer satisfaction.
Investors, partners, and customers will all be looking for updates on supply chain resiliency from companies in 2020. It’s an essential window to business health. They also know there will be another crisis down the line â€” civil unrest, a geopolitical rift, a cyberattack, a natural disaster, or something else.Â
Organizations of every shape and size will want to come out of this crisis stronger and avoid the devastating reputational, legal, and commercial effects of downtime. Investing in the resiliency and flexibility of their technology supply chain is a great way to start.Â
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