Mitigating supply chain disruptions in a pandemic world
Recent global events such as Covid-19 and the Russia-Ukraine war have deeply impacted supply chains. The disruptions have exposed vulnerabilities and highlighted the importance of skill sets, such as data analytics and real-time visibility, to effectively manage risks and ensure timely decision making. While some organisations were able to adapt their supply chains to the new reality quickly, others are still struggling. Many businesses have had to contend with issues such as staff shortages, supply disruptions, transport restrictions and changing customer behaviours.
The current crises have also led to a renewed focus on approaches to solve supply chain issues. By leveraging a multidisciplinary approach, businesses can develop strategies to mitigate the effects of disruptions when they do occur. Today, a supply chain specialist might employ economics concepts to help them better understand how changes in commodity prices could impact their supply chain; or master data analytics to make more informed decisions and shape better processes.
"Being in a strategic role requires me to be able to assess the market conditions and the company's internal and financial strength, in order to chart out strategic roadmaps for growth," observes SMU Master of Science in Economics (MSE) graduate Jeraldin Leo.
"I believe that by furthering my academic training in economics, I will be able to advance my career in strategy and perform my job better, build better business cases for market entry, conceptualising and operationalising new product offerings, and identify risks and other indicators that could affect the business."
Supply chains, interrupted
Covid-19 has revealed severe vulnerabilities in global supply chains. The pandemic has disrupted the flow of goods and services, leading to widespread shortages of essential items. This has been particularly problematic for countries that rely heavily on imports as they have been left struggling to obtain essential supplies. Even countries with strong manufacturing bases have been affected, as many factories have had to close up shop due to the shortage of raw materials.
"As the Covid-19 pandemic turned out to be a black swan event, we saw that it had impacted supply chain on a scale that no one has imagined," admits Jeraldin, Lead, Strategic Operations (Strategy and Analytics) at FairPrice Group.
"Despite the new normal, there are still lingering impacts, and we are already seeing the situations aggravated by the war in Ukraine. With so many moving parts, the supply chain is fragile. And with so many countries and so many business sectors affected by the pandemic one after another, many links within the supply chain could and have gone wrong."
These seismic disruptions are exacerbated by events such as shutting of production lines due to a lack of raw materials, port and airport closures due to workers being infected with Covid, some markets facing wastages while others experience extensive shortages due to lack of shipping containers, commodity supply fluctuations due to climate change, export bans due to low supply and high prices in domestic markets, and soaring oil prices affecting shipping and transport costs.
As Jeraldin adds: "The pandemic left us with little to no margin for error."
Data: The secret to managing disruptions
Formerly the deputy head of business strategy at Changi Travel International, prior to joining FairPrice, Jeraldin believes the MSE programme has helped springboard her career to the next level. The versatile Master's programme equips students with skill sets to collect and analyse economic, social and financial data, while developing a comprehensive understanding of global economic issues for strategic decision-making.
As part of a supply chain strategy and analytics team, Jeraldin is responsible for establishing her company's supply chain operations centre, using data analytics to monitor, detect, diagnose and predict potential risk and impact on inventory levels. She also looks at "on-the-ground intel" such as shipment and transport routes and network, warehouse and store situations to help anticipate potential disruptions.
Data analytics allows supply chain specialists to learn from past disruptions — be it Covid-19 and subvariant resurgences, the Suez Canal blockage, wars, food price inflation, egg farms disease outbreaks and even the more recent Malaysia poultry export ban.
"With the ability to see more, see earlier and see further, we can be better prepared for any crisis," explains Jeraldin.
"With the help of data, we can tell what products will be impacted, how government actions and other macroeconomics factors could affect demand and supply, and how severe the impact could be."
Upskilling to keep abreast of supply chain challenges
To stay ahead of disruptions in the market, businesses need to be agile and able to quickly adapt. Lifelong learning through hands-on experience can help supply chain professionals remain current in a fast-moving field, and embrace new skills necessary for transformation.
The MSE programme offers an in-depth study of economics and economic data analysis that also includes an entry pathway for students from other disciplines who do not have the necessary training in economic theory and quantitative techniques.
Moreover, as Jeraldin notes, its modules were not just theoretical but involved a blend of knowledge and practical application.
"The core modules strengthened my economics foundation, helping me understand factors that could affect our economy, industry and company and business," she elaborates.
"There were also modules with varied technicality and industry to help me customise my learnings. Econometrics, Statistics, Machine Learning and Behavioural Economics modules came in handy for me. It sharpens the way I collect and use information, and helps me to come up with solutions quickly, yet with rigour in thought."
As recent events have revealed, supply chains are the backbone of our economy — and they're more vulnerable than ever to disruptions. To successfully navigate these disruptions and keep business operations running smoothly, those in the logistics industry must upskill and equip themselves with knowledge and tools that can help them make better decisions under pressure.
A Master's in Economics can be a pivotal step in this direction, providing professionals with the skills needed to effectively analyse data and create actionable plans during times of crisis. With the appropriate training and competencies, supply chain professionals can effectively mitigate the effects of these disruptions, and future-proof their careers during an era of uncertainties.
"Disruptions to supply chain and business, in general, are here to stay, perhaps more frequent and complex," says Jeraldin.
"Economics is at the heart of managing the global supply chain. It is vital to have a strong understanding of economics fundamentals to understand, anticipate and forecast the relationships between demand and supply."
Last updated on 12 Sep 2022 .
