Transformational technologies can reduce supply chain stress caused by COVID-19

Transformational technologies can reduce supply chain stress caused by COVID-19

As the number of confirmed COVID-19 cases surges past 100,000, the disease is starting to take its toll on the world economy, with “significant disruption” to the global supply chain predicted, according to RMIT University experts.

RMIT University Logistics and Supply Chain Management Program Manager Dr Reza Akbari said while it’s too early to predict the exact forecast of what the full impact will be, opportunities for Vietnamese businesses exist now to trial and adopt new methods and measures for lean manufacturing, outsourcing and offshoring strategies.

RMIT University Logistics and Supply Chain Management Program Manager Dr Reza Akbari believes moving towards smart cities and digital transformation could be key to dissolving issues like pollution, traffic congestion and any future epidemics. RMIT University Logistics and Supply Chain Management Program Manager Dr Reza Akbari believes moving towards smart cities and digital transformation could be key to dissolving issues like pollution, traffic congestion and any future epidemics.

“Since many companies rely solely on Chinese manufacturing, any disruption to the upstream side significantly impacts manufacturing due to a lack of raw materials or components,” Dr Akbari said. 

“We’re already witnessing temporary closures of assembly and production lines all around the world in direct response to the closures of many factories and manufacturing facilities in China.

“Nissan, for example has had to reduce their outputs due to the shutdown in China, and similar cases are happening in South Korea where Hyundai had to suspend all operations due to a lack of parts and/or components from China.”

The effect has also been felt in Vietnam’s supply chain, as “China is Vietnam’s largest import partner and many of the imported goods are essential to Vietnam’s manufacturing sector”. Other central import partners like South Korea, Japan, Thailand, and the United States, have also been affected by the pandemic. 

Looking into the future, what should Vietnam plan for?

“Obviously, the coronavirus pandemic worries many people and organisations,” Dr Akbari said. “But it could ultimately give businesses a unique insight into the fragility of the current supply chain, to overcome a global crisis, and to improve the current global supply chain in the future.”

Dr Akbari believes “the impact of this significant disruption can change the way we currently manufacture, move and pay for products and services” and suggests a shift towards smart cities and digital transformation to dissolve issues like pollution, traffic congestion and any future epidemics like COVID-19.

“Transformational technologies could be revolutionary mechanisms towards a smarter and better-connected supply chain ecosystem, resulting in a flexible working environment, the removal of many current human tasks from the workplace, and protocol improvement enhancements for enhanced data sharing in the event of any outbreaks or disasters,” he said.   

“There are nine transformational technologies hailed as the most significant revolutionary tools for the future and they can be potentially applied to supply chains - 3D Printing, AI, Autonomous Vehicles, Big Data Analytics, Internet, Blockchain, Drones, Robotics, Virtual Reality (VR) and Augmented Reality (AR).

“To achieve this smart future, everyone and every organisation must work together, not only governmental agencies. The faster we react to crises, the sooner we can overcome any future disruptions or outbreaks.”

18 March 2020

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