Supply Chain Challenges for 2021


11-01-2021
Jan 1, 2021 image

The Global Economy is facing considerable challenges in 2021. No area of society will be unaffected by these issues – and supply chains are no different.

2020 – A year like no other.

From extended lead times, pressure on businesses and the encouragement of working from home, 2020 had it all.
COVID-19 emphasized the significance of building resilient, flexible supply chains for the manufacturing sector. Supply Chains that have the ability to connect deeply with customers.

For the coming months, lockdown three will ensure we must adapt quickly to make 2021 an exceptional year.

COVID 19 – THE IMPACT ON THE ECONOMY
The latest vaccine announcements have boosted optimism for a recovery in 2021. However, the global pandemic remains. Parts of the economy will recover to normal levels of buying and supplying, whilst other sectors may see a permanent change in their business models.

COVID-19 highlighted to us the fragility of global supply chains. With strong demand for new business, more Irish and UK companies are now re-shoring. The days of concentrating on manufacturing in countries where labour is cheap and plentiful could be well and truly over.

Navigating supply and demand planning in this uncertain environment will be a key challenge for businesses in 2021.

BREXIT MOVEMENT
The true certainty for Brexit is unknown, but as of January 1st 2021; all goods moving between Europe and the UK will be subject to checks. These custom controls will lead to Brexit Stockpiling, forcing prices up and increasing delays at UK ports. Irish traders must prepare to ensure their supply chains can meet the demand of these challenges.

The world is becoming increasingly unpredictable, with continuous economic shifts. Many businesses are now moving away from ‘just in time’ to a ‘just in case’ supply chain model. Businesses must ensure they have a dedicated supply chain that is responsive and flexible to fight the economic encounters and threats that may be ahead in 2021.

CHINESE NEW YEAR
With Chinese New Year on the 12th February 2021, this adds more pressure to businesses and their supply chain. Many will begin travelling home prior to this date and indeed stay for several weeks. The true extent of delays are difficult to predict, but it is certain to cause some hiccups for businesses relying on the operations of China to the UK mainland.

Orders should be placed well in advance, for assurance of shipping and delivery. Missing the opportunity of shipping by sea will incur additional costs using airfreight and the guarantee will become less likely.

With COVID-19 and Brexit already putting enough pressure on society and our supply chains; relationships and preparation are vital. Surcharges and delays are inevitable, but preparation will allow businesses to manage worse case scenarios effectively.

INCREASED RESILIENCY
If you want your supply chains to develop in 2021, resiliency is vital. Supply chains must be adaptable and responsive so they can react quickly if disturbances occur.

To build a resilient supply chain, it is important to implement some of these key factors within your business plan;
• Contingency Planning
• Localization
• Diversification
• Sustainability
• Agility
• End-to-End cost transparency
• Visibility

A strong, flexible supply chain requires constant investment into new technologies, and businesses are now starting to recognize this.

Most importantly, you need to make your Manufacturing footprint matter!

GAIN VISIBILITY ACROSS THE SUPPLY CHAIN
With the constant uncertainty within the supply chain, visibility will become the number one priority for effective management. Having a clear understanding of the location and status of inventory, the movement of stock and an accurate view of customer demand will become a basic requirement.

Digital tools are emerging that can be deployed across the end-to-end supply chain to drive transparency. This will include not only your company’s operations but also key suppliers, customers, distributors, etc.

The main message is to focus on visibility and relationships for the year ahead. Re-evaluation and focus to more local, stable services has become pivotal.

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Elite Electronic Systems is a leading strategic UK Electronic Manufacturing Services (EMS) provider, servicing all the high technology market sectors, with a key focus on Medical Devices. We are ISO 9001 & 13485 accredited. We deliver competitive, flexible & stable Supply Chain Manufacturing Partner Solutions for PCBA’s, Cable Assemblies, Box Builds & High Level Assemblies (HLA).

Elite Electronic Systems Limited