Because of their rarity, a black swan event is a name given to an unpredictable occurrence that is beyond expectations and has potentially severe consequences. The current global pandemic is certainly one that changed everything overnight, says Deepak Harie, VP of Technical Support Services Nokia.
This includes communication network usage, putting operators, their suppliers, and partners under immense pressure to keep up with the instantly altered demand and maintain service uptime in the face of severely restricted human, transport and manufacturing resources.
But it’s not just a pandemic that can cause severe global disruption. Erupting volcanoes, earthquakes, or political upheavals can have a similar effect on manufacturing, warehouse, logistics, and distribution. So, what have we learned during this year’s live test of critical communication networks and about helping ensure operators’ business continuity?
Supply chain challenges
Amid the uncertainty, spare part delivery and repair services must keep going so that infrastructure can remain up and running. But if the repair centre needs to close and there’s no other location where the required capabilities are available; and if airfreight gets exponentially expensive; and if local safety regulations only allow critical wares to be transported, what do you do?
In today’s global economy it’s normal for a product to be manufactured, stored, distributed, and then used in a different location or even continent. But if one warehouse becomes unavailable, services must be ramped up in another region and requests fulfilled from an alternate site, so it’s good practice to have a worldwide network of stocking locations. The same goes for production facilities: if a single factory is relied upon (or even a small number in a single region), there is a risk that production levels might not be able to satisfy demand if one, or more, are forced to close. Here, global suppliers have the advantage as they can transfer the necessary assembly process to any of their multiple locations. Even if they are dedicated to other products during ‘normal’ times, alternate sites can be recalibrated.
When relying on the supply of hardware and spare parts, especially in the case of a mission-critical or essential service, it’s vital to partner with a vendor that maintains a healthy stock level, distributed according to predicted fault levels and necessary stock dimensioning. A vendor that deals with larger quantities will be better positioned to rapidly increase inventory buffers to mitigate shortfall and to share inventory among its global stocking locations, based on predicted failure rate expectations and unfolding supply chain scenarios.
Anticipation and a solid business continuity plan are vital. For example, during times of disruption repairs might take longer than usual due to workforce or logistics issues. This means that an organisation that offers repair services has two options: reroute products for repair to an alternative location even if the logistics are more complex or transfer skills and ramp up a workforce to manage additional tasks and processes.
Either way, having a global footprint of sites and suppliers, which can be leveraged for transferring workloads, balancing capacity and increasing target inventory will prove to be a significant benefit. Some of the largest network infrastructure vendors have contingency plans that involve ring-fenced inventory to the value of millions of Euros and have distributed parts of their central warehouse stock to satellite warehouses across the continent of Australia, to mitigate possible disruptions and support critical orders.
Transportation also has a major effect on global supply chain efficiency. Times of major disruption are likely to be characterised by scarce and expensive transport resources. Securing transport will depend on the ability to cope with increased prices and may well come down to a competition of strength and market position. Again, the large corporates will be better positioned to ensure hardware services get priority and secure air transport on key lanes during global capacity restrictions.
If airfreight becomes too expensive, alternative transport options such as rail transport can help ensure capacity and keep control of costs. But even when transport capacity is secured, lockdown measures can strongly hinder logistics as local safety regulations might only allow critical wares to be transported. Under these circumstances, a partner should proactively encourage its suppliers to obtain “Critical Business Status” for supporting telecommunications. Securing approvals from local authorities in this way will help enable the continuous transport of goods and operations.
The best partner for business continuity
What have we learned during this year’s global live test of telecommunication networks? As operators and their entire value chains have been under pressure to keep track of the changing demand and maintain network uptime, it was vital to work hard to fulfil contractual obligations, and service level agreements.
It is during these times that suppliers and vendors prove their true value. So, in anticipation of when another worldwide disruptive event occurs – and it will – it’s worth partnering with a vendor whose supply and delivery organisation had its metal tested this year and proved its ability to be a reliable partner for any communication service provider.
The author is Deepak Harie, vice president of Technical Support Services Nokia.