Posts in category: Supply Chain Resilience News

According to an economist, as the world struggles with rising fuel prices, supply disruptions, inflation, and the impact of Russia’s invasion of Ukraine, the energy crisis enters the top 10 global risks for the first time at #4 in its Risk Barometer.

The invasion of Ukraine by Russia, the largest exporter of fossil fuels in the world, in February 2022 further destabilized the international energy market. Following the drought, hydropower capacity was affected throughout much of Europe. In France, more than half of the nuclear reactors were shut down for maintenance or due to technical difficulties.

The timing of the current energy crisis is the only aspect that is not negative. Europe and other places are about to undergo a green transformation.

Therefore, businesses must decide whether to proceed toward the electrification of production processes and the hydrogen economy, which will require prudent investment, or rely on energy-cheap foreign countries.

While the energy crisis may eventually help the economy decarbonize, it may also make climate policy less popular due to the rise in energy poverty unless effective and lasting aid measures can be implemented.

According to an economist, a new social contract is required to solve the long-term issues posed by the increased energy prices expected to occur throughout the green transformation.

What can businesses do?

Identify critical business processes that a gas or electricity shortage may impact, either directly or indirectly.

Consider how long it will take to resume operations properly and how this may affect employees, customers, or suppliers.

Outline the measures that can be taken to ensure that your critical business processes are resilient to gas or energy shortages. Test your business continuity management plan with a power outage-based scenario.

It is essential to regularly review the business continuity management process if the regulatory, political, or energy market situation changes.

The energy crisis has also demonstrated that decarbonizing the economy is a need rather than an option. According to Allianz, this necessitates billions in investments in new technology and a comprehensive redesign of corporate reporting, ensuring compliance issues continue to rank among the top five risks.

According to the theory that these factors are precisely what eventually become financially significant, this puts non-financial issues at the forefront of reporting.

Last but not least, extending the reporting scope beyond the existing emphasis on financial risks discloses information a considerably more complicated exercise since the CSRD adopts a double materiality approach, and it necessitates evaluating both impact directions.

The impact materiality focuses on an asset’s environmental and social impacts from the inside-out perspective. In contrast, financial materiality is focused on the effect of environmental, social, and governance (ESG) issues on the financial performance of assets from the outside-in perspective.

The pandemic has required a higher use of technology across many industries. Nowadays, Artificial intelligence is used in every industry, including logistics. Below, we will discuss how artificial intelligence will be used in the logistics sector and how that will help it grow. AI applications in the logistics sector are primarily intended to reduce time-consuming actions and costs.

Demand Prediction

In logistics firms, there is a lot of coordination and planning done between suppliers, customers, and other departments. With AI, we can utilize real-time data, improving demand prediction accuracy. It will help manufacturers optimize the number of vehicles dispatched and save operational costs. Local retailers and warehouses can also lower the cost of holdings.

Optimization of Sales and Marketing

For sales and marketing, AI offers diverse aspects. Examples include analyzing consumer behavior and using predictive analytics to have a better understanding of what a customer is most likely to do next. Because they can monitor market developments closely, freight forwarders benefit from AI’s ability to stay ahead of the competition and make informed choices.

Real-time Decision Making

Finding the best carriers and transporters and optimizing routes at a competitive cost takes a lot of time and effort. However, with the help of AI, freight forwarders can instantly utilize thousands of datasets for recommending the carrier and route that is most cost-effective.

Automated Offices

Document automation technologies can be an excellent way to handle documents by automating data entry, error reconciliation, and document processing to maximize document processing efficiency. With these technologies, businesses may automate several back-office functions, including scheduling, tracking, report generation, email processing, and other office tasks.

A Better Customer Experience

Using big data from AI, freight forwarders may gain a better knowledge of their customer’s behavior, preferences, interests, timing, etc… A faster shipment process and reduced costs can be achieved by minimizing human errors.

The logistics and freight sector will be able to utilize AI-based technology effectively if freight forwarders rise to the challenge and successfully apply it.

The logistics industry in India has seen significant instability over the last three years and new challenges as the country recover from the epidemic. Stakeholders cite the workforce as one of the major ones now.

According to the co-founder of a logistics firm, the industry is facing driver shortages for deliveries. During the festive season, when the traffic load was high, it caused many more problems. A courier aggregation service claims that logistics companies struggled to reach the expected delivery time, which resulted in dissatisfied consumers.

A co-founder of a logistics firm claims that the industry is the most disorganized and fragmented in the country. It needs to be streamlined to increase the effectiveness and efficiency of the operations.

According to a logistics provider, there is an increase in the demand for shipments. However, this industry has several issues with employment opportunities and driver retention. Truck drivers, forklift operators, skilled workers for warehouses, and other positions are critically needed in the country’s logistics industry to keep up with the demands of a growing economy.

With the budget coming soon, the stakeholders claim the government has an opportunity to address these and other problems affecting the logistics industry, which is the foundation of trade and commerce.

Additionally, some experts compare the recent claims of unemployment with the need for better workforce management in logistics. There is an opportunity for gainful employment here, and the budget may outline the several routes necessary to hire, train, and retain staff to benefit the industry in the long run. However, the challenges are making jobs in the logistics sector attractive and encouraging individuals to consider it a career option.

According to a logistics provider, rising fuel prices are another challenge hurting the logistics sector. The road is India’s most common mode of transportation, mainly because overcrowded rail networks, multiple handling, and high rail tariffs make it difficult to use those services.

However, due to recent volatility in fuel prices, transportation costs have significantly increased, putting logistics firms under a lot of pressure. He also brings attention to the inadequate conditions and restricted locations of warehouses.

According to him, building a sizeable integrated warehousing space is challenging because of the need for a qualified workforce, high warehouse rent, and higher interest rates. He also notes that there is a need to streamline the processes at various stages in the industry.

According to experts, India’s logistics costs as a percent of GDP are high, and lowering them can significantly boost the sector’s operations, employment, and growth.
According to the government, by 2024, the logistics cost percent to GDP, which represents the cost of transporting goods, should decrease from around 16% to around 10%, making it more competitive with developed or similar countries.

The logistic provider is cited that in the upcoming budget, the government may address crucial concerns, including rising rental rates, fuel, and transportation expenses, fragmented communication, and infrastructure expenditures which have significantly increased the logistics service’s operational costs.

There should be an incentive-based structure in place. For instance, people who construct warehouses can get rewarded, and the tenant should be able to rent the space for considerably less per square foot. The government should consider giving incentives to businesses that invest in automation and warehouses that use such technology.

Any sector stakeholder is aware of the need to use more technology. It equips most companies to compete with any major player on the global stage. However, the high fees are only affordable for some companies.

According to the logistics provider, the budget might boost logistics automation costs, encouraging even smaller firms to adopt new technology. Focused investing in advanced technology is urgently required, according to a logistics company expert.

We can foresee that the budget for 2023 will strongly emphasize improving India’s logistics ecosystem by utilizing data-driven technologies to make it even more technologically advanced, integrated, affordable, and reliable. As there is a severe shortage of skilled workers and professionals in this industry, the logistic company expert also emphasizes improving human resource skill sets.

We need to support R&D and innovation by establishing training institutions that can teach students about advanced technology. The sector also has to encourage equal employment opportunities for women and people of the third gender, cited the logistics company expert.

A logistics provider suggests that the budget should consider investing in more multi-modal logistics parks. She adds that we anticipate an investment in port infrastructure this year to address logistical inefficiencies and that the industry’s efficiency will be the main focus.

Industry leaders eagerly await the National Logistics Policy’s implementation to streamline operations and lower logistics costs.

According to an international air transport group, the world’s air cargo market demand weakened as economic issues persisted.

Global demand, measured in cargo tonne-kilometers for international operations, fell 14.2% in November 2022.

There are a variety of factors to consider in the operational environment.

A leading indicator of cargo demand, global new export orders remained steady. With the exception of Germany, the US, and South Korea, where they increased, new export orders for major economies are declining.

In October, the global goods trade increased by 3.3%, showing that maritime freight was the primary beneficiary given the decline in air cargo demand.

Given that many costs are denominated in US dollars, the US dollar’s fast appreciation has increased cost pressure, including jet fuel, which is already at high levels.

The usual peak season in November saw a decline in air cargo performance. Demand is generally steady from month to month, demonstrating resilience in economic uncertainty. But, there are conflicting market indications. In November, oil prices stabilized, inflation eased, and a modest increase in the volume of products exchanged globally, among other positive factors.

However, declining export orders globally and an increase in COVID instances in China warrant close observation. Compared to the same month in 2021, air cargo volumes for Asia-Pacific carriers fell by 18.6% in November 2022.

This was the lowest performance of all the regions, and it was worse than in October. Lower levels of trade and manufacturing activity, as well as interruptions in supply chains, as a result of China’s escalating COVID cases, continue to have an effect on airlines in the region.

Asia-Pacific has a 32.6% market share for carriers’ overall cargo traffic measured in cargo tonne-kilometers.

This 2022, the Russia-Ukraine conflict, combined with wider geopolitical implications and the repeated COVID-19 lockdowns in China have caused an unprecedented disruption in the global supply chain, forcing businesses to rethink their entire value chain from raw material sourcing to end customer. Businesses of all sizes have been left grappling with the commercial, operational, financial and organizational challenges posed by these disruptions.

In response, CEOs are looking to the future and seeking to build resilience into their supply chains by increasing investment in disruption detection and innovation processes.

But how can businesses best adapt to the new reality and ensure that their supply chains are future-proofed?

In this article, we will be exploring the key supply chain issues this year and new strategies that are being rapidly deployed to help build resilience and agility.

Upskilling and Adopting New Technology

The pandemic has also caused shortages of manpower and raw material, which in turn led to production delays or even halts. This situation revealed the lack of resilience in supply chains and served as an opportunity for industry leaders to re-evaluate their long-term supply chain strategies. Companies are recognizing the need to prioritize risk management as a key part of their supply chain decisions, while also looking to make their supply chains more resilient and cost-effective. To mitigate staffing issues, organizations should look into the adoption of new technology in supply chain operations, while ensuring employees are trained on required skills and capabilities.

Revolutionizing Disrupted Global Supply Chain

Global supply chains are often unprepared when disruptions happen, businesses are not nimble enough to react and resume proper operations. This has caused a significant decrease in supply of goods. Furthermore, flows of goods into key markets are restricted due to shutdowns of ports and airports and congestion at customs, these ports include the Port of Singapore, Port of Shanghai, Port of Hong Kong, Port of Busan, Port of Qingdao, Port of Tianjin, and Port of Dalian in China, as well as ports in Japan, South Korea, Malaysia, and other Asian countries. We are experiencing a ripple effect across supply chains – shipments are delayed at ports and goods get piled up in storage.

Assuming that disruptions recede and access to sea and airfreight revert to pre-pandemic levels, it might take some time before things return to normal. In the meantime, consumers should expect to see higher prices and longer waits for retail shelves to be replenished, especially for imported products. Furthermore, items requiring repairs and maintenance could be delayed in lengthy service queues. Government and industry leaders are striving to design strategies that increase domestic capabilities, making them less reliant on regional and global supply chains. Companies should consider redesigning supply chain flows, storing inventory closer to customers, and improving last mile deliveries and returned goods.

Broadening Trading Partnerships

Despite the inherent risk associated with having one major trading partner, many businesses have strong relationships with one large customer, one major supplier and/or one major supply chain partner. Businesses have to recognize the need to broaden their trading partnerships by identifying alternative suppliers, markets, customers and logistics providers. In addition, supply chain leaders are turning their attention to third and fourth parties’ ongoing risk monitoring to address inherent, residual, cyber and counterfeiting risks more effectively. Consequently, to increase agility and resilience, businesses are investing in new technologies and services such as trading systems, planning and analytics capabilities.

Investing On Advanced Digital Support System

This year, many companies have made initial investments to automate key nodes within the supply chain, including stores, warehouses, manufacturing facilities and corporate office buildings, in order to enable efficient, effective and safe operations. This level of investment is expected to be accelerated in 2023 as businesses seek to adopt more advanced digital enablers, such as cognitive planning and AI-driven predictive analytics, as well as employing advanced track and trace and blockchain technologies to add greater integrity and visibility into secure supply chains. With the help of these advanced technologies, leading organizations are making strides to improve visibility throughout their extended supply chains.

Future Supply Chains Success Factors

Supply chain issues have been a major topic of discussion for many organizations this year. Although it has affected the flow of goods, there is no doubt that these experiences have enabled businesses to develop better strategies and plans to ensure that these challenges can be better managed in the future. In 2023, it is vital that supply chains possess the following characteristics to stay relevant.

TAPA’s comprehensive approach to supply chain resilience and sustainability ensures that our members’ supply chain remains secure and efficient. TAPA Standards and trainings are designed to upskill the industry workforce and empower businesses with the right processes and solutions centric around the post-pandemic needs for the future.

For more information about TAPA Standards, please kindly email to [email protected].

2022年，俄罗斯与乌克兰的冲突，加上更广泛的地缘政治影响，以及中国反复出现的新冠肺炎疫情，导致全球供应链出现前所未有的中断，迫使企业重新思考从原材料采购到最终客户端的整个价值链。大小企业都在努力应对这些中断带来的商业、运营、财务和组织结构等方面的挑战。

为了应对这些挑战，首席执行官们正着眼于未来，通过增加对中断觉察和流程创新的投资，寻求在供应链中建立韧性。

但是，如何才是企业适应新情况的最优解，并能确保其供应链经得起未来考验？

在本文中，我们将探讨供应链在今年中遇到的关键问题，以及正在快速部署的帮助建立韧性和灵活性的新战略。

颠覆和采用新技术

新冠肺炎疫情的流行还造成了人力和原材料短缺，进而导致生产延迟甚至停工。这种情况揭示了供应链缺乏韧性，同时也是行业领导者们重新评估其长期供应链战略的契机。企业认识到需要将风险管理作为其供应链决策的关键部分，同时也希望使其供应链更具韧性和跟高的成本效益。为了缓解人员配置问题，各组织应研究在供应链运营中采用新技术，同时确保对员工进行相应技能和能力的培训。

颠覆中断的全球供应

当中断发生时，全球供应链往往没有做好准备，企业没有足够的灵活性做出反应并恢复正常运营，从而导致了商品供应的大幅减少。此外，由于港口和机场的关闭以及海关的拥堵，关键市场的流通货物受到限制，这些港口包括新加坡港，中国的上海港、香港港、釜山港、青岛港、天津港和大连港，以及日本、韩国、马来西亚和其他亚洲国家的港口。我们正在经历供应链上的连锁反应——港口发货延迟和货物堆积在仓库中。

假设中断好转，海运和空运恢复到新冠肺炎疫情流行前的基准，则需要一段时间才能恢复正常情况。与此同时，消费者将看到更高的价格，等待零售货架补货的时间更长，尤其是在进口产品方面。此外，需要维修和维护的项目可能会在漫长的服务队列中等待。政府和行业领导者正在努力设计战略，以提高本国内的能力，减少对区域和全球供应链的依赖。公司应考虑重新设计供应链流程，将库存储存在离客户更近的地方，并改善最后一公里的交货和退货。

扩大贸易伙伴关系

尽管存在一个主导的贸易伙伴存在固有风险，但许多企业都与一个大客户、一个主要供应商和/或一个主要供应链伙伴有着密切的关系。企业必须认识到，需要通过确定可替代供应商、市场、客户和物流供应商来扩大其贸易伙伴关系。此外，供应链领导者正将注意力转向第三方和第四方的持续风险监控，以更有效地解决固有的、零散的、网络犯罪和假冒风险。因此，为了提高灵活性和韧性，企业正在投资于新技术和服务，如交易系统、规划和分析技术。

投资先进的数字支持系统

今年，许多公司进行了初步投资，将供应链中的关键节点（包括商店、仓库、制造设施和公司办公楼）自动化，以实现高效、有效和安全的运营。随着企业寻求采用更先进的数字赋能技术，如认知性规划和人工智能驱动的预测分析，以及采用先进的跟踪、追踪技术和区块链技术，以提高安全供应链的完整性和清晰度，预计2023年将加快些领域的投资。在这些先进技术的帮助下，领先的组织正在大步提高其延伸供应链的清晰度。

未来供应链成功因素

供应链问题是今年许多组织讨论的主要话题。尽管它影响了货物的流动，但毫无疑问，这些经验使企业能够制定更好的战略和计划，以确保未来能够更好地应对这些挑战。2023年，供应链具备以下特征将有助于其保持在本领域的竞争力：

TAPA对供应链韧性和可持续性的全面性策略，确保我们成员的供应链保持安全和高效。TAPA标准和培训旨在提高行业员工的技能，并为企业提供以后疫情时代需求为中心的正确流程和解决方案。