CIO Talk News

Supply Chain Disruption and Managing Growth


When sun rise and sunset happens properly people call this magic trick but when things go wrong everyone start doing analysis and predictions. Similar things go with a customer’s he goes to the store and finds exactly what he need neatly stacked on shelves. If customer order online, they can receive a box on their porch as quickly as one or two days later. In many places, people have become accustomed to these conveniences. But when the supply chain is disrupted by local events like natural disasters or global events (like pandemics, War), suddenly the magic seems like it was all smoke and mirrors. 

Supply chain disruptions create scary and uncertain times for businesses and consumers alike. They also draw attention to our supply chain dependencies that we are otherwise not aware of when everything is operating like a well-oiled machine. Sometimes these disruptions are small and localized, and may affect only a few businesses or industries. Other times they are globally felt, especially when the hard-hit region is a source of a diverse range of supplies. The COVID-19 global pandemic has caused a major upheaval in the supply chains of many businesses’ world over. Similar things happens when Russia-Ukraine war started in Feb 2022.  

A supply chain is a network of people, organizations, and activities that move a product from a supplier to a final customer. A supply chain disruption is any sudden change or crisis be it local or global that negatively impacts that process. The original equipment manufacturer (OEM) is at the top of the pyramid. Tier 1 suppliers are the last step before the OEM.  They are the final step before the OEM which may market and distribute the product to end users. 

Tier 2 suppliers produce and supply parts to Tier 1 suppliers. They are usually smaller businesses, but no less important in the supply chain. They must adhere to strict safety and regulatory standards to make sure their products will be accepted by Tier 1 companies. Tier 3 suppliers are the foundation of the supply chain in that they provide raw materials like metal and plastics from which the other suppliers can construct specific products. This interdependent chain can experience delays and inefficiencies regardless of where the disruption occurs. These effects are compounded when one supplier is the only source for that part of the supply chain or when one area holds most of the options for a particular supply. 

Cyber attacks can occur to any business at any time who has not adequately protected themselves. Supply chain can also inadvertently open you up to attacks. If any link in your chain has lax security protocols, that may be an opportunity for hackers to get access to data. Once the data is compromised the supply chain can be disturbed.  

It’s a good idea to take stock of where the market demand is and how it may have shifted. In light of the pandemic, as an example, the increase of online ordering skyrocketed as businesses closed their physical storefronts. Now, as more people are working remotely and using technology to their shopping advantage, they want goods that meet their current needs.  Reviewing data will show trends in purchases and allow to make more informed decisions about restocking or readjusting inventory. 

By streamlining efficiencies, using new technologies will help companies lower their operational costs and be more flexible in their supply chain process. Technology can promote automating processes and accelerating business growth through data-driven decisions. Once business gets 360-degree view, they can plan to curb supply chain disruption.  

I think as a CIO one must be vigilant on cutting age technology and keep deploying a wide range of technology and focusing on delivering new capabilities quickly across the entire business. CIO must be astute in both business and innovative pace of technology change.   

By: Anil Kamble, Director – Information Technology, LGT Wealth India Pvt. Ltd.

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