Blog Post
The importance of having a diverse supply chain network
Website Editor • Mar 02, 2020
Supply chain diversity is becoming increasingly more important to be implemented by companies as the global business world becomes more interconnected.
Supply chain diversity is becoming increasingly more important to be implemented by companies as the global business world becomes more interconnected. Diversity in the supply chain is a business strategy that secures a broad supplier base for businesses. This is able to demonstrate social responsibility of companies by utilising a number of suppliers and in turn reducing the impact of potential supply chain issues.
Supply chain diversity provides multiple channels from which businesses can obtain their goods. This allows for more competitive pricing, and the ability for companies to take full advantage of growth opportunities for business expansion due to the emergence of new consumer needs based upon changing demographics. Supply Chain Dive
has highlighted that companies such as Walmart sourced an extra $250 million in 2017 due to the diversification of their supply chain. A more diverse supply chain also nods to pertaining business leadership in such competitive markets as it provides a point of differentiation to consumers. The Hackett Group Diversity study 2017, attributed a 16% increase in sales due to competitive differentiation by companies that utilised diverse supply chains.
By having a diverse supply chain companies can assure themselves of continued production and an efficient operations process in the event of supply chain issues. In recent times, the COVID19 has impacted companies with sole suppliers greatly. Although the virus has now spread globally, its originations from China have resulted in many product suppliers having to temporarily shut down to reduce the spread of the virus. Companies such as Apple
are currently facing great supply chain issues as there is a shortage of iPhone product parts being supplied. This has resulted in the predicted inability to meet their quarter financial targets and an immediate loss of 13% of their projected half-yearly profits.
As a result of COVID19, previous supply chain procedures have been disrupted by unexpected temporary closures therefore companies have been met with unprecedented shortages. This reflects the importance of having diverse supply chains to avoid detrimental effects that occur when supply chain networks become constraint. The Australian
reports that COVID19 has cost the global economy USD 2.2 trillion, and is still growing. Businesses must create a new equilibrium in their operational and logistics processes, and utilise more diverse supply chains to deal with this withstanding global setback. In an ever-changing world with unpredictable events occurring so often, businesses must take every measure to assure themselves of continuous operational flow regardless of external forces.
The advantages of supply chain diversity are plentiful however, it does also give rise to challenges that companies must combat. A diverse supply chain means that it can be challenging for businesses to manage and track their consignments during transportation. Ineffective tracking and management of assets and consignments can result in assets being lost, stolen or misplaced. Adapt Ideations smart asset tracker KELVIN
empowers businesses by giving them the ability to digitally track their assets and inventory, thereby increasing their consignment management and reducing misplacement and loss of goods. The smart asset tracker is an easy to utilise solution that features tracking and geo-fencing capabilities that relays near real-time data back to the company allowing end-to-end visibility to be developed. A more efficient operations and supply chain process forges a greater relationship with clients, therefore increasing business growth and reputability.
In an ever-globalised world, relying on complex supply chains for imports and exports of products has become the norm. Therefore, while having a diverse supply chain is of high importance, maintaining an efficient supply chain is also significant in business growth. Adapt Ideations’ KELVIN, features near real-time location, temperature monitoring, shock and light exposure. Businesses globally are utilising KELVIN to optimise their supply chain, manage assets and heighten their inventory accuracy, therefore creating a more competitive and effective supply chain in global markets.
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Temperature-controlled logistics is a crucial aspect of global supply chains, particularly in the pharmaceutical industry. Maintaining the correct temperature during transportation is not just a logistical issue but also a critical factor in ensuring the safety and efficacy of life-saving vaccines and other temperature-sensitive products. As the demand for temperature-sensitive products like vaccines and biologics continues to surge, ensuring their safe transportation is paramount. Any deviation in temperature during transit can compromise the efficacy of these products, leading to significant financial losses and potential health risks. This blog delves into the evolution of temperature-controlled logistics, critical challenges faced in this sector, and groundbreaking innovations that address these challenges. With a focus on real-time monitoring through IoT solutions, we aim to showcase the advancements that contribute to the efficiency and compliance of global pharmaceutical supply chains. Evolution of Temperature-Controlled Logistics Temperature control has undergone a remarkable transformation in the last two decades. Stringent global regulations, customer demand for new temperature ranges, emerging markets with extreme temperatures, and the growing value of drugs like biologics have been essential driving forces. These factors have spurred the evolution of temperature-controlled logistics to meet the demands of a rapidly changing world. The landscape of temperature-controlled logistics is evolving, thanks to technological advancements. Trends include the growing availability of prequalified shippers simplifying the validation process, sophisticated supply chain services, a rising interest in reusable packaging, and advances in temperature-monitoring technology. These innovations contribute to the industry's ability to adapt and thrive in a dynamic environment. Temperature-controlled logistics involves managing the flow of products through a cold chain. Divided into food and pharmaceutical sectors, the global market size of cold chain logistics is projected to grow significantly. From USD 242.39 billion in 2021 to USD 647.47 billion by 2028, exhibiting a CAGR of 15.1%, the industry is expanding rapidly, reflecting its critical role in modern commerce. 3 Key Challenges in Temperature-Controlled Logistics Compliance Issues Stringent Regulatory Standards: Global temperature-controlled logistics operates within a framework of strict regulations set by health and safety authorities. Meeting diverse regulatory requirements across international borders poses a significant challenge for companies in this sector. Documentation & Reporting: Compliance involves meticulous documentation and reporting of temperature-sensitive shipments. Keeping up with the evolving documentation standards requires streamlined processes and robust systems. Validation & Qualification: Ensuring the validation and qualification of equipment and processes according to regulatory standards is an ongoing challenge. The need for continuous validation adds complexity and time constraints to logistics operations. Risks of Temperature Deviations Product Integrity: Temperature-sensitive products, especially pharmaceuticals and biologics, are highly susceptible to temperature deviations. Even brief exposure to temperature breaches during transit can compromise the integrity and efficacy of these products. Financial Implications: Temperature deviations can lead to significant financial losses for companies. Replacing or disposing of compromised products and potential legal repercussions contribute to financial challenges. Supply Chain Disruptions: Temperature deviations can disrupt the entire supply chain, leading to delays in product availability. This not only affects businesses but can have critical implications for healthcare providers and patients relying on timely access to medications. Security & Theft Concerns Value of Cargo: Temperature-sensitive cargo, such as pharmaceuticals, vaccines, and high-value perishable goods, can become a target for theft. The significant value of these products heightens security concerns throughout the supply chain. Vulnerability During Transit: The vulnerability of cargo during transit, particularly in unsecured areas, poses a constant risk. The potential for theft during transportation adds complexity to securing temperature-controlled shipments. Need for Tracking & Monitoring: Ensuring the security of temperature-sensitive cargo requires robust tracking and monitoring systems. Integrating security features, such as real-time location tracking and tamper-evident technologies, is essential to mitigate theft risks. In navigating the intricate landscape of temperature-controlled logistics, companies must address these multifaceted challenges to uphold compliance, safeguard product integrity, and ensure the security of valuable shipments. Innovative solutions, such as advanced monitoring technologies and comprehensive security measures, are crucial in overcoming these challenges and fostering a resilient and efficient supply chain.
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