Building Resilience – Strategic Skills for Businesses to Survive Supply Chain Challenges
In these times of global uncertainty, unexpected events are more likely from geopolitical conflicts to worldwide disease outbreaks. Technological change is so rapid that industry is often racing to keep up.
Even a small disruption can call for a change of direction such as a barrier to transporting goods by sea freight. And significant shocks in the trade environment and supply chains can lead to pivoting across industry. An example is the shortage of semiconductors for smart fobs and related electronics used in the automotive sector. This represented a sudden disruption in the availability of critical raw materials that affects production and delivery downstream. The consequences were significant. Production was delayed in the automotive industry, vehicle output reduced, customer waiting times extended, and some manufacturers prioritised higher-margin models or temporarily halted assembly lines.
Associate Professor and Head of Education Group - Digital Technologies and Machine Intelligence, WMG
Creating a toolkit to handle supply-chain shocks
When thinking about trade and supply chains, micro and small medium enterprises (MSMEs) are particularly vulnerable to these shocks because they don’t necessarily have the potential to deal with them. If there’s an unforeseen event, some businesses find themselves in a position with little or limited flexibility or extra capacity in their resources such as financial reserves, inventory or staffing to cope.
What companies who trade both nationally and internationally require are toolkits to build resilience. They need the right skills and knowledge to be agile, efficient and resilient to recover quickly and avoid expensive mistakes.
How do MSMEs and micro-businesses alongside multinational enterprises develop frameworks tailored to their individual requirements? Businesses can face and be exposed to major challenges if they navigate the complex regulatory requirements around trade alone. Another alternative is to hire consultants to provide guidance and operational strategy which comes at a high financial cost.
Education that’s accessible and fit for purpose
Companies need expert support to help them navigate – and the solution is education. Education that’s based on robust evidence and data. But also, education that is accessible and applicable in the real world.
Gaps in knowledge cannot be addressed unless we know what business wants. To be fit for purpose, academic practice has to be translated into what the implications are for business practice. The theory and research need to be taken off the page and put into operation to address uncertainty in supply chains and trade, and to help companies withstand and navigate difficult times.
Education can be an agitator to push for improvements and get people to think outside the box.
Managing the shift from just-in-time to just-in-case
Education can be an agitator to push for improvements and get people to think outside the box. There are advantages in a just-in-time approach for inventory and sourcing such as lowering holding costs and waste. But companies need to build in buffers against potential shocks by shifting to a ‘just-in-case’ culture. To think about what might be coming in the future.
Supply chain and trade education is essential for business and industry. Multi-nationals will have integrated supply chains, extensive links and the financial backing to diversify and sample different suppliers. Arguably, they can pivot and change supply chain and business flows from one geographical region to another at short notice. This is not the reality for micro-businesses and SMEs with potentially limited inventory, investment constraints, limited funds and workforce.
However, education can provide them with the skills to think strategically. Such businesses may not have the financial capability to establish new market entry or engagement in case of supply chain shocks. What they can do is consider alternative, pragmatic solutions which fit current business constraints.
Skills to create visibility in trade
The trade environment has become increasingly turbulent. A challenging new landscape has been created by unpredictability of tariffs and regulatory demands, for example around rules of origin, customs duties and quotas, and import and export declarations. Education puts the pieces of this complex ‘jigsaw’ together and creates a clearer picture for businesses. For example, by guiding a UK exporter through a complete end-to-end supply chain scenario. They can be shown how product classification, rules of origin and logistics decisions interact so they can then successfully move a shipment internationally without delays, penalties, or rejected goods.
Visibility is the foundation of successful trade. From raw materials to the end product, the ability to track and trace every aspect of the supply chain reduces risk. With the right toolkit, businesses can detect and anticipate issues before it is too late, such as using real-time tracking of goods, digital tools and strengthening every tier of supplier relationships.
Companies with few employees do not have the capacity to send them on training courses lasting months. The answer lies in skills-based learning led by academics in partnership with industry in the form of short courses.
Collaboration, co-creation and co-delivery
Companies need confidence to address expected challenges coming down the line – and the unexpected that happens now. Collaboration, co-creation and co-delivery with industry must be at the heart of education for business. With the right insights and support, companies can develop their own techniques for problem solving.
Education that fits with day-to-day need
To be effective, education and training have to be designed around the day-to-day pressures facing companies, both financially and operationally.
Companies with few employees do not have the capacity to send them on training courses lasting months. The answer lies in skills-based learning led by academics in partnership with industry in the form of short courses. Or half-day workshops where professionals come together to discuss, analyse and resolve challenges based on scenarios and actual events.
Resilience in business is not innate – it develops from experience and learning skills over time. Education based on blending theoretical knowledge with practical application can have a powerful impact on industry. And create the strength needed to cope with the roller-coaster ride of global supply and demand.