Business as usual is not an option – Professor Edward Sweeney

Professor Edward Sweeney.

The arrival of full customs checks on 1 January after the end of the temporary grace period, as well as the ongoing disagreement over the Northern Ireland protocol, demonstrate that these issues remain complex in the year after the UK government “implemented Brexit”.

In the early days of the pandemic, logistics also came into focus. We all remember the panic buying that took place ahead of the first lockdown in March 2020, when the ubiquitous toilet paper rolls became a symbol of the challenges facing supply chains. Since then, the supply chains that bring personal protective equipment (PPE) and Covid-19 vaccines to the front lines of healthcare have been the subject of intense media attention. The latter are of particular interest given the stringent requirements for storing mRNA vaccines such as Pfizer/BioNTech at ultra-low temperatures (sometimes as low as -80°C). The pandemic has also contributed to other freight and logistics challenges, including a sharp increase in international shipping costs over the past year.

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It is important to remember that all goods reach the consumer through a chain of companies – the supply chain. In recent years, these supply chains have become increasingly international, and sometimes truly global, as a result of the reduction in barriers to international trade in recent decades. This process of business globalization has made supply chains more vulnerable to international political and economic instability. In parallel, markets have become more sophisticated and customers more discerning, expecting more and more in terms of quality and service, and intense competition is putting downward pressure on prices.

During the lockdown in March 2020, the toilet paper roll became a symbol of the challenges facing supply chains.

Technology continues to develop at a rapid pace. In particular, it is very difficult for small companies to keep abreast of these developments, and there is evidence of a “digital divide” between large multinational companies and their smaller counterparts. These technological developments have made it easier to collect large amounts of data on a wide variety of variables in supply chains. However, this so-called “big data” is of little value unless it can be transformed into something useful and usable in terms of supply chain decision making. This leads to a strong focus on data analysis and visualization techniques that rely heavily on often quite complex mathematics.

Talent shortages are well documented in many parts of the supply chain. The shortage of drivers of heavy vehicles has attracted significant media attention, but the skills gap is evident in many other areas. The pandemic has created new challenges as a result of lockdown-related volatility in demand patterns and the availability of products and services. Widely lauded just-in-time supply chain models with a strong focus on waste elimination are facing a growing realization that holding stocks “just in case” may be more appropriate in certain scenarios to increase resilience.

Perhaps the biggest supply chain challenge is the real threat of climate change. Supply chain activities, including but not limited to freight transport, damage the environment, in particular through greenhouse gas emissions. The development of more resilient supply chains is now a key focus across all sectors. Heriot-Watt University is a leading player in green logistics research, especially in sustainable road transport. In short, “business as usual” is simply not an option – developing more resilient processes is now a vital strategic imperative.

The smart and sustainable supply chains of the future will be globally integrated, facilitated by advanced technologies, environmentally sustainable and structurally sustainable. They are the key to sustainable economic and social well-being.

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