Today, we are uncovering the unsung hero of the business world: the supply chain. Often overlooked, it is the backbone of any successful venture, from small startups to industry giants. This truth has been highlighted more than ever in the wake of the Covid-19 pandemic, where businesses have seen disruptions and obstacles in their supply chains like never before. Yet, amidst these challenges, the supply chain emerges as a key player in business resilience and long-term success [2,3].
In this digital era, the intricacies of supply chains have grown exponentially. They are no longer linear and domestic but have become complex, interdependent networks scattered across the globe. In this ever-evolving landscape, resilience and efficiency are crucial to ensure business survival and growth [3].
But here’s the thing, building a resilient supply chain isn’t always easy. According to Harvard Business Review, a major barrier to making supply chains more resilient is justifying the financial investments. Measuring resilience, projecting future cash flows, and obtaining the required data for such investments are all challenges that businesses face [1].
However, these obstacles can be addressed by reframing and evaluating resilience investments differently. Two common resilience measures are time to recovery (TTR), the time it takes to rebuild lost capacity after a disruption, and time to survive (TTS), the duration the firm can continue to meet demand after a capacity loss. Together, they can guide a business in maintaining service continuity following disruptions [1].
Now, let’s talk numbers. Businesses cannot afford to overlook their supply chains in the e-commerce realm. According to a survey conducted in the UK, 15 million Amazon shoppers ventured into new product categories during the first national lockdown. This surge in online demand puts immense pressure on supply chains, underscoring the need for meticulous inventory management [2].
What’s more, a recent report by Profitero found that brands could lose up to 42% of sales when their stock rate drops from 90% to less than 30%. It takes about three to four days to regain full sales volume after being out of stock for just one day. Furthermore, recovering search ranking after going out of stock could take up to six to seven days and may require additional investment [2].
These statistics are a stern reminder of the importance of efficient supply chain management, especially in the e-commerce sector. A well-managed supply chain ensures the availability of stock, maintains sales volume, and keeps the brand visible and accessible to the customers in this rapidly changing landscape, data is a brand’s best friend. Sellers can analyze search trends to predict changes in consumer demand, examine consumer traffic to forecast peaks and troughs, and react accordingly to manage their inventory effectively. Focusing on a portfolio of products with high in-stock rates and good sales performance can help businesses deal with inventory complexities and ensure potential for sales recovery [2].
Moreover, some companies are getting creative with risk measurement as part of their resilience strategy. For instance, a high-tech company uses natural language processing tools to analyze social media data for early warnings about imminent risks. A fashion consumer products company focuses on measuring supplier risks such as financial stability and geographic concentration. Yet another company created an automated, data-based, risk-assessment tool that considers a variety of risks including geographic, supplier, manufacturing, and delivery [1].
In conclusion, the secret to business success lies in the often-underappreciated hero – the supply chain. It is not merely a functional component of a business but a strategic tool that, when efficiently managed, can significantly impact a company’s financial success. By embracing the challenge of building resilient supply chains and investing in advanced tools and measures, businesses can turn uncertainties into opportunities and ensure long-term profitability.
There is no doubt that the supply chain is your key to business success. And now, you know that it isn’t just a hero, but a super-hero, ready to swoop in and save the day when managed right. So, let’s give a hearty cheer to the unsung heroes of the business world, the supply chain, as they help us navigate the uncertain waters of the business landscape with resilience and efficiency.
“The supply chain is the business. Supply chain management is the business managing the business. In other words, supply chain management is the new business management.” – Art Van Bodegraven and Kenneth B. Ackerman
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