How to Enjoy Successful Supply Chains Amid Wars and Geopolitical Crisis

It’s the wars and rumours of war season, but it’s not an excuse for your supply chain to fail.

After all, a great supply chain always delivers, even amid crises such as warfare or a pandemic. With the current global economic downturn and drums of war, businesses are working around the clock to prevent disruptions in their supply chain. Several times over the past two years, we have been close to a third world war. Russia’s war in Ukraine has escalated, countries are taking sides, and the same is happening with the Israel-Hamas war.

Even within Africa, it’s been one coup after another.

In the face of crisis, it is obvious that supply chains and businesses are constantly thinking about how to navigate them. However, despite all of these, the good news is that it is possible to run and operate a profitable supply chain amid all of this. There might be some adjustments, but those are to be expected.

In this article, I have compiled a few tips to get the best out of your supply chain during a war.

1. Adjusting Inventory Management

No supply chain can function without an inventory during crisis or peace times.

Inventory management strategies help plan and control inventory flow. Inventory management is generally classified into push, pull, and just-in-time inventory. Today, businesses favour or use a collaboration of inventory management techniques. For Example, the Zara supply chain uses a mix of just-in-time and pull strategies. As war looms, businesses or supply chains may want to consider switching up their inventory management model.

For example: holding more inventory, especially in areas or markets that could be heavily impacted should a world war break out.

Another idea will be to adopt different inventory management strategies for different markets, especially in uncertain markets. War doesn’t impact every country or geographical region equally, so it makes sense to manage them differently.

2. Locally Source Raw Materials

Logistics becomes a nightmare during the war, especially on an international scale.

That nightmarish scene makes dealing with international suppliers or vendors challenging, and it can lead to disruptions, especially in regions affected by the war. In preparing for warfare, supply chain managers or businesses need to consider sourcing as much as possible locally. It will help shore up many weaknesses and mitigate disruptions should a war break out.

Global outsourcing is a strategy adopted by many corporations worldwide.

It won’t be easy to overhaul such strategies, especially for corporations with multiple international markets. But these organizations can localize supply chains in the market they operate.

3. Establish Supply Chain Resilience

Supply chain resilience is the supply chain’s ability to resist or recover from disruptions.

Organizations and supply chain managers should make their supply chains more flexible. For example: having one supplier can be disastrous to your supply chain, especially in unplanned disruptions. The organization can get multiple suppliers for the same product or service to strengthen the supply chain’s resilience.

In times of war, supply chain managers can strengthen their supply chain process by collaborating with other supply chains or finding alternative transportation routes for goods and services.

4. Rework The Supply Chain to Reduce Cost

Cost is bad for supply chains but especially terrible during conflict or war.

The world has struggled to recover from the pandemic, contributing to the current economic downturn. The war between Russia and Ukraine and that of Israel and Hamas has contributed immensely to the problem. Ocean freight and many land freight have been compromised. Supply chains have not been spared from these effects, causing disruptions and forecasting fluctuations.

Example: Fertilizer shortage is threatening food shortages in Europe.

Russia and Ukraine predominantly exported fertilizers, but because of the war, there was a pause, causing panic in the market. Natural gas supply into Europe has also suffered, causing sky-rocketing bills for families and industries. If things are getting this bad, Imagine what it will be like if war breaks out.

To combat current and potential rising costs, supply chain managers should rework their supply chains to eliminate potential money pits in the supply chain.

Wrap Up

As businesses and supply chains continue to work around the clock to think of how to prevent supply chain disruptions as much as possible, it is important to accept that in many cases, there would be hard choices. Much of the world has never experienced war, so managing a successful supply chain amid all these, especially in Africa, might be tricky. However, with these tips, the supply chain will do well.

Leave a Reply

Your email address will not be published. Required fields are marked *