THE AFTERMATH OF SUEZ CANAL CRISIS ON SUPPLY CHAIN AND WHAT CAN

BE DONE TO MANAGE IT.

Well, it aint the first time there has been a crisis on the suez canal. The waterway shipment
which is responsible for the 12% of the global had seen a few intervals.
In March 2021, the Suez Canal was blocked for six days after the grounding of Ever Given, a
20,000 TEU container ship.[3] The 400-metre-long (1,300 ft) vessel was buffeted by strong
winds on the morning of 23 March, and ended up wedged across the waterway with its bow
and stern stuck in the canal banks, blocking all traffic until it could be freed.
On 28 March, at least 369 ships were queuing to pass through the canal.
This unforeseen situation had put the whole system in the jeopardy, and not to forget the fact
almost a billion dollar money went in vain.
At this situation how actually many companies whose their products that need to be shipped
to the customers across the ocean were literally hovering over the water, managed the crisis.
The Suez situation could compound issues for a supply chain already under pressure
from the pandemic and a surge in buying.
Digital mitigation stratergies:
It is critical that leaders assess their key vendors and suppliers to determine if any businesses
they work with have been impacted by the incident to avoid forcing a major shutdown to a
company’s supply chain due to a single point of failure, expert says.For years, supply chain
managers have embraced the global nature of their supply chains, and this incident is a
perfect example of how managers can leverage the benefits of a more globally diverse supply
chain by working with their alternative suppliers in non-impacted regions of the world to
offset the delays.
The expert says that effective risk-management solutions also are a growing necessity to
manage a company’s supply chain as well as its overall reputation. By investing in data-
driven technology today, supply chain leaders can more easily evaluate and on-board new
suppliers, while also continuously monitoring their full global network, they say. This allows
them to create an agile, geographically dispersed supply chain that can quickly pivot during
any circumstance.
Digital-enabled supply chains can also drive some efficiency, but the best way to manage a
company’s supply chain is to really know your suppliers and your suppliers’ suppliers.
Transparency into your network of suppliers, as well as a diversified supply chain will help
mitigate risk in the short and long-term.
Supply transparency also is key. A major contributor of making supply chains more stressed
is an over reliance on just-in-time inventory and planning models that cannot possibly take
into account unexpected events. they recommend that companies invest in a real-time
visibility solution that offers a full picture of available inventory and how warehouses are
processing that inventory, which will make pivots more effective.
Building additional physical stock at various points throughout the chain will help as well.
Companies need to get used to the fact that this will increase their carrying costs, and they
will need to decide whether to reset shareholder expectations or pass costs onto their
customer.