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Supply Chain Challenges for the New Normal
How Telecoms Can Evolve Their Processes Post COVID-19 —
Before COVID-19, one might say consumers had the blissful privilege of reaping the benefits of remote technology and applications. Today, in the "new normal" of working from home, consumers have higher demands for their wireline and wireless networks. When the Internet is latent or down, very few consumers stop and think I wonder if this is due to the supply chain challenges of increased network access from home.
Let’s be clear. Latency is a more than bad word in a world where we expect instant gratification and transparent communication.
As a result, telecoms need to adapt to the higher demands of consumers — including adjustments to its supply chain. The telecom supply chain for labor and equipment has been heavily disrupted, making it harder to keep up with the growing demand. Supply chain constraints from manufacturing locations that were previously heavily relied on (such as China) have resulted in extended lead times to customers, ultimately impacting serviceability, and, therefore, revenue.
A virus has no prejudice to the location of its effect, and as an equal opportunity destroyer of global economies, it has impacted businesses everywhere. Despite improvements to manufacturing capacity, the remainder of 2020 still presents challenges as operations attempt to restart under controlled and limited working conditions.
Reflecting now, it seems only a few months ago that words such as machine learning, artificial intelligence, cloud, and digital supply networks (DSNs), seemed to be buzz phrases to most. As many countries continue the directive to maintain social distancing, the world has changed.
Telecoms are meeting challenges head-on by turning those previously stated marketing buzz phrases into reality — and as fast as possible.
Challenges
One article, as published in Forbes,1 describes some of the challenges (both familiar and new) telecoms are facing amid COVID-19, including:
• Keeping up with the increased demands in bandwidth.
• Making adjustments due to shifts in the methods and locations people access their platforms.
• Finding sourcing elsewhere.
• Trying to meet the needs and challenges faced by customers whose businesses struggle to manage from home because of the amount of computing power and bandwidth required.
• Balancing the need to provide entertainment while securing and prioritizing bandwidth for essential things like healthcare, e-learning, and collaboration.
Communication Service Providers (CSPs) have stepped up during this pandemic: equipping essential workers with connectivity and devices, increasing network capacity for the increase in remote work, providing support to remote and virtual customer care, and even working with customers on billing during financially challenging times.
The challenges can be summarized into 2 groups: short-term and long-term.
Short-Term Challenges include an increase in operating expenses, prioritizing capital expenditures, revenue, cash management amid down economies, and optimizing the supply chain.
Long-Term Challenges include the acceleration of digital transformation, ramping up the automation of operations, acceleration of new services, and securing digital access.
In terms of the challenges faced specifically by supply chain demands, telecom providers — whether prepared or not — have to face the reality of their vulnerabilities to global market shocks. Pre-COVID-19, market turmoil in one region could easily have been mitigated by sourcing elsewhere. However, global market shocks, equipment, and labor instability, have forced providers to seek out new supply chain technologies to mitigate these risks.
The demand on telecoms to supply and meet expectations, reduction in business development opportunities, and the need to conduct business only via mobile communications — all have an impact.
COVID-19 and Telecom(4)
Operations and supply chain challenges per PwC current disruption could result in future dips in equipment revenues, slow down, or delay the delivery of network equipment.2
There can also be a decrease in service quality as more demand is placed on mobile and communication networks, and tests in adjustment to scale to the spike in call center volume.
The Harsh Realities
Early on in the pandemic, the telecom supply chain was heavily impacted as the initial surge originated in China, where a large number of people were struck by the disease and among the first forced into quarantine. This region was heavily relied on for manufacturing. COVID-19 led to partial and full shutdowns of plants and factories, therefore impacting production.
In any other market crisis, companies could initiate contingency plans, such as ramping up production in a different region.
However, COVID-19 made it difficult for companies to find alternatives as it spread globally. It became a matter of finding which areas had not been hit yet or had minimal exposure. Even then, the ability at which these alternatives could replicate the resources and output of China was not an easy task.
Technology companies whose imports relied heavily upon the exports from China and other countries hit hard by COVID-19 suffered severe setbacks. Although COVID-19 has left some feeling uncertain, and it is still too early to know exactly what this means for the latter half of 2020, there is some optimism wherever companies can find areas of momentum within their businesses.
It is imperative, if not already underway, that CSPs transition their supply chain models to one that provides end-to-end visibility to mitigate the risks associated with COVID-19 or other global market impact events.
So, how can telecoms strengthen and prepare their supply chain?
Staying Connected(5)
Here are some recommendations:
• Focus on the wins; keeping people safe, healthy, and connected, is a big win in terms of customer perception.
• Source elsewhere.
• Be proactive and data-driven.
• Speed to action is critical. Continuously review your system capabilities for remote workers.
• Take steps to fulfill customer priorities around maintenance and confidence.
• Reassess supply chain to uncover weak links.
• Ensure open and frequent communications with suppliers.
• Have contingency plans in place to meet demand.
• Be transparent with stakeholders, customers, and suppliers.
• Use analytics to reduce stress from call center volume.
• Identify customers most likely to be affected and develop proactive communication plans to keep them informed of policy changes and service disruptions.
• Adjust support models as necessary.
Now that service providers and businesses know that employees can work from home, how many companies will ask their employees to come back to the office once the coronavirus restrictions relax? Many sources reveal that a hybrid working environment will likely be the new normal, which means the steps taken by the telecom industry to adapt the supply chain will not be in vain.3
There is still much to be done to keep up with the "new normal," but it seems as though the telecom industry is passed the survival phase and moving on to making improvements. The good news is that COVID-19’s impact will help progress the telecoms industry into the beginning of a new era.
Benjamin Franklin said by failing to prepare, you are preparing to fail. Telecoms have never faced COVID-19 before now, and although some structures helped prepare them to meet the supply chain challenges initially, it is those that continually prepare for the future that will best weather the "global storm".
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Resources and Notes
1. Wilson, Craig. "IBM BrandVoice: The Telecom Industry Is Proving Essential In The COVID-19 Response." Forbes, Forbes Magazine, 15 Apr. 2020, www.forbes.com/sites/ibm/2020/04/15/the-telecom-industry-is-proving-essential-in-the-covid-19-response/.
2. PricewaterhouseCoopers. "COVID-19 and the Telecommunications Industry." PwC, www.pwc.com/us/en/library/covid-19/coronavirus-telecommunication-impact.html.
3. Harper, Justin. "Coronavirus: Flexible Working Will Be a New Normal after Virus." BBC News, BBC, 22 May 2020, www.bbc.com/news/business-52765165.
4. https://telecoms.com/503804/ofcom-fails-to-clear-up-the-myths-around-5g-and-the-coronavirus/
