Supply chain - MeRLIN

Responding to COVID-19: Navigating Supply Chain Disruptions with MeRLIN

COVID-19 turned out to be a black swan event that is disrupting the global economy and supply chains unlike any crisis in the last few decades. Empty supermarket shelves and consumers desperate for supplies have become a common sight worldwide. It has put business leaders around the world under immense pressure to maintain their business operations and fulfill customer demands amidst the crisis.

Government regulations and factory shutdowns could be blamed for many of the challenges. However, the real issue was that the entities, from suppliers to manufacturers to retailers didn’t have sufficient flexibility and mitigation options built into the supply chain to respond to the situation effectively and in a timely manner. Some organizations resorted to “panic buying” just as the consumers did and ended up with severe cash flow challenges due to both unplanned buffer stock as well as the spike in material costs.

The crisis has proved it beyond doubt, to many organizations that they are still not prepared for such unprecedented situations and have made them realize the vulnerabilities of their existing supply chain models. While procurement leaders have concentrated their initial efforts on managing supply disruptions from their tier 1 and tier 2 suppliers by rebalancing short term sourcing decisions with regards to their supply network constraints, now they need to look for agile plans to build greater responsiveness and future proof resilience into their supply chains at all tiers.

But, figuring out the best plan is not easy for sourcing professionals with a lot on their plate amid the crisis – determining the demand shifts, looking into inventory position, and evaluating the supplier options and financial implications. The steady-state models on which most existing planning systems are based on are no more sufficient to ride through this tide. You need access to real-time information to make the right decisions. Some of the major challenges that procurement professionals face in building supply chains that can adapt to disruptions can be summarised as:

● Lack of visibility of the entire supply chain
● Lack of data to gain insights and take decisions
● Supplier risk management
● Effective communication and collaboration
● Ability to respond rapidly and proactively

Leveraging technology becomes essential to cut through most of this chaos.

Fortunately, today new Strategic Sourcing solutions are available that can dramatically improve the visibility across the supply chain and equip organizations with cutting-edge tools that equip them to respond quickly to such global shocks. The traditional linear supply chain models need to transform to digital supply networks to break organizational silos and become connected to their complete supply network. Advanced technologies today, like IoT, AI, Cognitive Computing, and Big Data can work together to give substantial visibility into inventory, demand, capacity, supply, and finances across the ecosystem to give meaningful insights. Effective planning with this data and insights can act as your key to managing the crisis now and also result in building a stronger foundation vital to your future growth as things normalize and economies rebound.

A procurement solution like MeRLIN allows organizations to absorb supply chain shocks more seamlessly by addressing the major challenges. It enables end-to-end visibility of the entire supply chain as well as provides more transparency through enhanced collaboration across the partner ecosystem allowing suppliers and buyers to work in harmony to fulfill demands.

MeRLIN’s supplier relationship management tool allows you to mitigate supply chain risks by monitoring your suppliers through real-time analysis based on various risk categories like operational, financial, and regulatory, and legal compliance as well as take advantage of global sourcing using MeRLIN’s data aggregation. MeRLIN also has many more advanced features like the AI and fuzzy logic search that enables organizations to identify their spend leakages and optimize the procurement function.

MeRLIN has been used very effectively by a large automotive supplier based out of North America during this crisis. They were able to identify risks across the supply chain by spotting their plants impacted or suppliers who were put to risk due to the lockdowns in place and moving their loads to alternate supplier options available. They were also able to improve their cash flow management by looking at their payment terms across their 12,000+ suppliers, identifying where they were unfavorable, and fine-tuning them to optimize their cash flow. And the highlight is, they were able to do all these in a short span of a few days and respond to the crisis proactively. Without an intelligent procurement solution, it would have easily taken at least a few months for gathering this information to make any decision.

Contact us to know more about MeRLIN and leverage the power of AI, Advanced Analytics, and automation to get more visibility to your entire supply chain network to enhance its flexibility and resilience to any disruptions.


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