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Establishing a Flexible Digital Supply Chain
Prior to the COVID-19 pandemic, supply chain resiliency had become an important issue due to disruptive natural disasters and geopolitical disputes, especially tariffs and trade wars. Despite the growing likelihood and severity of supply chain disruption, the primary metric companies traditionally used to evaluate suppliers is lower cost, not the impact of disruption on both cost and revenue.
Many companies already knew that their supply chains were too dependent on single suppliers for given components. They understood that flexible and digital supply chains should have been a clear priority. But they were also bogged down by legacy infrastructure issues with the lion’s share of their IT spend going toward sustainment.
Manufacturers now need to build out digital and flexible supply chain capabilities to ensure they proactively pivot to future disruptions. Secure platform-based supply chains need to guarantee the continuity of product supply and collaboration to meet their customers’ expectations.