Plan Strategically in Volatile Times
The pandemic pushed businesses to firefight supply chain challenges and learn to navigate volatility and disruptions as the new operational norm.
Three years into the pandemic businesses are realizing the need to pivot from a short-term supply chain risk mitigation mindset to long-term strategic planning. However, strategic planning is not easy in an ever-changing landscape.
Key issues technology companies should consider as they build their strategic operation agility and resiliency plan include:
Supply Chain Visibility: Chip shortages of the past few years have revealed the complexities and vulnerabilities in the electronic supply chain and the need for businesses to have transparency in their value chain.
Some key supply chain risk factors to consider as part of your strategic operation plan include:
- Rapid evolution of technology and market availability: For the past couple of decades technology progression has led the need for smaller and faster components. As a result, manufacturers have focused on leading-edge chip production and obsolescence of older technologies at a faster pace making product life cycle management challenging for businesses. Having visibility into your supply chain, building an agile approach to product procurement and proactive product life cycle management strategies are critical in achieving business success and in maneuvering this ever-changing industry landscape. Learn more.
- Climate Change: Record atmospheric greenhouse gas concentrations and the accumulated resulting heat have propelled the planet into a climate crisis. Increased storms and record heat has left key geographical areas vulnerable, causing power, water, and other resource shortages which have major impact on the global manufacturing industry. Learn more.
- Geo-political Instability: Geo-political threats such as the Russian invasion of Ukraine and the tensions between U.S and China have exposed dependencies in the electronic supply chain. Europe for example has been facing an energy crisis which can impact the electronic supply chain further. Learn more.
Environmental, Social, and Governance (ESG) Regulations: As climate disasters steadily increase and social impact issues become forefront, governments across nations are placing increased compliance regulations on businesses, especially in the technology sector. Staying up to date with these regulations is essential to building a strategic operation plan.
Some regulations to be aware of include:
Corporate Environmental Impact: The U.S Securities and Exchange Commission (SEC) recently proposed new ESG and climate disclosure rules for public companies .The legislation requires publicly traded companies to disclose and define ESG metrics, including direct greenhouse gas (GHG) emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2) as well as, upstream and downstream activities in its value chain (Scope 3) emissions and their fossil fuel-related assets. This represents a growing global business push for more consistent, transparent ESG reporting standards by companies. Learn more about the importance of ESG in the technology sector.
- Human Rights Compliance in Supply Chains: The U.S. government and other nations have also increased scrutiny of human rights violations within the corporate supply chains. The U.S. recently passed the Uyghur Forced Labor Prevention Act (UFLPA). The law essentially bans the import of any goods produced by forced labor or any good that has been manufactured entirely or in part in the Xinjiang Uyghur Autonomous Region of China. Companies are required to produce evidence that their supply chains do not touch Xinjiang or involve any forced labor or slavery practices. Learn more.
- New European Union Compliance Regulations: Europe is facing increased heatwaves, drought, and climate disasters as a result, the European Union (EU) has been working on more stringent environmental sustainability regulations. The new REACH and RoHS requirements impact the semiconductor and electronic manufacturing industry, and it is essential for businesses to understand the regulations and implement strategies to stay compliant. Learn more.
Other key factors and challenges businesses should consider as part of their overall strategic operation plan include:
Cybersecurity: Cybercrime magazine reports that global cost of Cybercrime will be $10.5 Trillion annually by 2025. Cybercrime cost U.S. businesses more than $6.9 billion in 2021, and it is predicted that this cost will increase annually. 82 percent of CIOs believe their software supply chains are vulnerable and software supply chain attacks hit three out of five companies in 2021. Cybercriminals have penetrated 93 percent of company networks with the most common causes of cyber-attacks being malware and phishing attacks.
Having a robust strategic network security plan to protect sensitive intellectual property (IP) data, financial documents, and customer information is vital to your business. Having awareness of your supplier and value chain cyber susceptibilities is another key component of your strategic plan.
Digital Transformation and Integrations: Digital tools, automation, and changes in technology have led businesses to upgrade and invest in new technologies at a faster pace. Introducing new tools into the business workflow can create complications especially if various tools among departments don’t integrate with each other. Managing integrations to ensure various tools and applications communicate through API’s is a critical part of any digital transformation and businesses IT infrastructure. Lack of communication among systems can be costly, time-consuming and disruptive to a business. Keep platform integration in mind as another key component of your strategic planning process.
Data Management: Data is vital to business in their strategic decision-making process, but irrelevant or bad data can lead to poor decisions, inefficiencies, and business losses. Sifting through magnitude of data and deciphering relevancy to your operations is time consuming and costly. Adding to the complexities is bridging internal and external data and data integration across teams. According to Gartner, making erroneous business decisions based on bad data could cost small to mid-sized businesses on average over $15 million per year in losses. Keep in mind that up-to-date, relevant, intelligent data and impactful analytics are key to team collaboration and the strategic business planning process.