By Luis Martinez-Amago, Deputy CEO Technicolor, President of Connected Home
The dialogue shifts to the imperatives of continuity, agility, resilience and transparency (CART).
The current coronavirus pandemic is straining global supply chains, and companies within the connected home ecosystem – from factories and logistics providers to component suppliers and manufacturers. As a result of this crisis, the latest in a series of ecosystem shocks, we are now beginning to see a new dialogue emerge on how to best build and manage end-to-end supply chains.
The global pandemic has halted – or reduced operations to minimal capacities – in the wake of sourcing challenges, labor shortages and quarantine measures that have been pursued around the world. These challenges have placed pressure on network service providers (NSPs) who rely on the supply chain to deliver new customer premises equipment (CPE) as the connected home infrastructure becomes more critical to the personal and professional lives of consumers.
Although the effects of this global health pandemic have not been seen before on this scale, major disruptions are nothing new to executives in supply chain management. It appears that a crisis of some sort has occurred every 12 to 18 months over the past few years. Today it is the coronavirus. Before that, the connected home supply chain was disrupted by tariffs and trade wars, critical shortages of ceramic capacitors, bidding wars for memory chips, natural disasters...and the list goes on.
Re-Thinking Core Organizing Principles
The industry is coming to grips with the need to examine strategies that are based on the assumption of stable trade and commerce. We are consequently seeing the supply chain dialogue shift from a focus on efficiency to the imperatives of continuity, agility, resilience and transparency (CART).
Continuity – While efficiency is important, the principle of “continuity” requires a commitment to some level of redundancy that may appear to add cost back into the supply chain process. However, given the demonstrated volatility of global markets, many NSPs are now making investments in supply chain partners that have diversity on the back-end to offer options to unanticipated interruptions in capacity.
Agility – The ability to leverage communications and collaboration to rapidly bring up capacity in one part of the world while winding down operations in others has been greatly enhanced by new platform technologies and improved analytical and tracking tools. Moving forward it will be important to have leaders of skilled rank-and-file personnel who can shift gears quickly across multi-vendor supply chains. While achieving this objective is not easy, it is an investment that pays off when crises disrupt existing operations.
Resilience – It will be increasingly critical to rebuild capacity in supply chain segments that are damaged by a crisis, even as companies shift operations to new sources. This resilience is critical to maintaining the options necessary for enabling continuity in the future.
Transparency – The inability to see the status activity through several tiers of the supply chain is a major impediment to continuity of supply chain operations. It is important to put the systems – and more importantly, the relationships – in place that make it possible to understand the disposition of operations across multiple organizations. It is the only way to understand the current state of the situation, determine when that state is disrupted, and properly contribute to the planning and execution that will accelerate a return to “normal” operations.
Technicolor and its supply chain partners have made a major commitment to incorporating the CART principles into our joint operations. It has enhanced our ability to navigate and mitigate risks for our NSP customers during times of uncertainty. Indeed, this is no longer a “crisis management” posture; it is the “new normal” that we believe will be critical to sustaining success in the connected home ecosystem over the months and years to come.
Learn more about the CART principles of supply chain management from Luis Martinez-Amago and also How Technicolor is managing and maintaining the supply chain.