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There are few crises in world history that have affected the supply chain like COVID-19. The pandemic has caused unprecedented stress and brought an insane level of scrutiny.
Business leaders need to think differently and take appropriate measures to streamline their supply chain operations, using data as their guide. Otherwise, keeping up with the competition and curbing the damage the pandemic has already done will be difficult.
In this blog post, we will discuss the future of the supply chain industry, what challenges businesses might face, and how to repurpose your supply chain according to the changing dynamics. Let’s begin:
What Does the Future Hold for the Supply Chain?
Here is what we can expect to see in the supply chain sector:
1. Shifting from globalization to localization
The shift from globalization to localization is the most significant impact on the supply chain post-COVID-19. Logistics hubs will resurface in regional areas. Product integrations, sub-system suppliers, and component suppliers will begin assembling and supplying products from their backyards to establish a flexible supply chain and remove single-source dependencies.
2. Humans will play a crucial role in rebalancing the global supplies
With the unemployment rates spiking due to the COVID-19 pandemic, the food supply, agriculture industry, and grocery stores face labor shortages. Amazon announced 100,000 new roles last September. It means humans will once again play a pivotal role in rebalancing the global supply chain. Without them, all strategies and statistical models will fail.
3. Supply chain is the new lifesaver
The COVID-19 crisis has also helped us understand the significance of the supply chain. Now, it is more crucial than ever. The supply chain is the new lifesaver. We need it if we ever want to get back to normal.
However, this brings along a new responsibility for supply chains. They must become more adaptive and prepare for major catastrophic events like earthquakes, lethal pandemic outbreaks, strikes, or social unrest. Doing so requires adopting new strategies and overcoming new challenges.
Issues We Need to Address in the Global Supply Chain
1. Day-zero and beyond planning
We noticed how grocery and essential commodity retail stores faced out-of-stock situations on some products because people were busy hoarding supplies. To ensure such incidents don’t happen again when any such calamity occurs, retailers need multi-scenario planning and real-time operations alignment.
Retailers also need to assess the accessibility of essential materials and then map them to high-value products and revenue streams. Apart from this, organizations also need to review existing contingency plans and review contract agreements to identify and address crucial risks on time.
3. Supplier risk assessment
Continuity of supplier/vendor operations is a critical concern among businesses. They need to identify their top suppliers and see if they can meet the supply requirements. Doing so is essential because the suppliers’ inability to meet the supply requirements and the quality standards can have a terrible impact on the speed/viability of their business operations.
4. Monitoring inventories and the flow of goods
Keeping in mind how consumer panic-buying had resulted in stock-outs, actively monitoring inventories and keeping track of the supply flow is another big challenge among businesses. Some of them have even started investing in technology-driven dashboards and apps that keep them updated on the state of goods.
5. Delivering to the last mile
Delivering goods at customers’ doorsteps is another major supply chain issue that businesses need to overcome at any cost after the COVID-19 pandemic. Retailers must review the locations of delivery centers and distributors to compute risks by geography. It will also help them identify potential stress hotspots that need to be fixed.
Businesses with export operations worldwide need to evaluate their export plans by country. It will help them ensure optimal flow planning under constrained resources. They also need to consider the risks associated with each destination. It is even better if these companies partner with established players to offer digital ordering or last-mile delivery capabilities.
6. Assessing cash/liquidity position
Businesses also need to carefully examine their liquidity positions along with the potential investment, borrow, or liquidity options – so that they don’t run out of cash or liquidity assets and the supply chain operations don’t get interrupted. You can also use tools for cash prediction and management. They will offer a detailed cash-view over a long timeframe and under different situations.
7. Shifting to “safe retailing”
COVID-19 has made consumers favor health over comfort. Over 82% of them intend to buy products from retailers/brands who have taken appropriate measures to improve their product hygiene and supply chain hygiene after COVID-19. So, it has become essential for retailers and consumer goods suppliers to pay critical attention to health hygiene.
8. Establishing an emergency war room
Keeping the current scenario in mind, it has also become crucial for retail stores and consumer goods enterprises to establish emergency war rooms where they can make decisions quickly and supply amenities faster during emergencies.
Best Supply Chain Practices That Can Help Businesses Get Back on Track
1. Using blockchain
Businesses can use the power of blockchain to improve visibility and traceability across the supply chain. The famous American seafood company Bumble Bee Foods, LLC is already on it. It is using blockchain to ensure food safety and traceability.
The company is allowing its consumers to be aware of each step in the fish-to-market journey. Just by scanning a QR code on the product, they can instantly know about the fish, when it was captured, and which fishing community captured it.
Apart from this, some companies are also using blockchain for building smart contracts to control, automate, and execute transactions.
2. Regularly monitoring supplies using temperature loggers
We all know how we need to store some items like food and supplies in appropriate temperature conditions during the supply chain. Even the slightest change in the temperature can render them useless. To avoid this, it is essential for businesses to regularly track and monitor the temperature of their supplies using temperature monitoring systems.
3. Using graph analytics
All the efforts to repurpose the supply chain are useless without graph analytics. Without it, businesses fail to analyze the links of various entities in the supply chain and make reckless decisions that prove harmful in the future. That is why it is essential to use the power of graph analytics. It will improve your supply chain to a great extent.
4. Using hyper-automation
Hyper-automation can be another efficient way to regulate the supply chain post-COVID-19. It helps you automate the supply chain faster by using process analytics to identify processes that can be automated, automate these processes, and then manage the processes that were automated.
In a Nutshell
As Accenture puts it into words in a study on supply chain analytics, this is the time of unprecedented supply chain disruption. We are facing out-of-stock situations across the globe and businesses need to think if they want to repurpose the supply and survive the change.
We had certainly not thought that one day we will face a situation like this. But now is the time to get back on track – and with the right strategy and appropriate measures, it is possible. All we need is to step up, accept responsibility, and be patient. Only then can we survive this change.
What are your thoughts on repurposing the supply chain after COVID-19? Please let us know in the comments.