The global pandemic exposed a lot of gaps in the world’s supply chains, with everything from life’s basic essentials to personal protective equipment (PPE) to electronic components becoming scarce at different stages of the outbreak. As the pandemic ensues, companies that were caught off guard are working to shore up their supply chains and prepare for a brighter 2021.
“Now there is a new urgency to fill the gaps that the pandemic exposed, minimize risk, build resilience, and connect more deeply with customers,” The Network Effect states. “Companies are reevaluating their offerings, processes, systems, channels, and partners. Supply chains are at the forefront of the effort.”
7 Resolutions to Put on Your List
For companies that want to build out more resilient supply chains that can withstand the next disruption or shock, there are some key lessons to be learned from the events of 2020. Here are seven resolutions that should be on all shippers’ radar screens as we close out the year and head into 2021:
1) Commit to using fewer siloed, unintegrated technology systems. The massive inefficiencies of these self-imposed business barriers came to light in 2020, with organizations recognizing that they need to be eliminated. “These silos have artificially propped up costly inventory buffers, caused information delays, hurt service levels, and bring with them the enormous IT cost of interfaces, maintenance, and upgrades,” The Network Effect points out. In their place we’re seeing more collaborative business network platforms that cut across all these silos, “talk” to one another, and help streamline global supply chain activity.
2) Put a bigger focus on agility. Supply chains need flexibility and agility in order to function at their best, and to quickly respond to changes. “The agile trend in supply chain management has shifted from traditional supply chain methods,” Manufacturing.net observes. “As we have seen in recent times, unforeseen events do occur. With agility, companies can prove they can cope with natural disasters or pandemics.” An agile supply chain also helps companies navigate scarcity and disruption, it adds, and predict and identify potential problems and solutions.
3) Use more Internet of Things (IoT) and Big Data. As IoT advances, businesses can automatically manage their inventory and stock movement better. “The system works by collecting big data into a central system for analysis,” Manufacturing.net points out. “From the outcome, supply chains can derive valuable insights. Big data application in the supply chain [also] improves operations, hiring processes, or marketing strategies.”
4) Commit to staying flexible and adaptable. According to Supply Chain Quarterly, the most important takeaway from the pandemic is the need for companies to build flexibility into their organizations that can help them react and adjust to short-term supply chain disruptions. “For the longer-term,” Victoria Kickham writes, “companies should focus on adapting to any permanent changes that result from those disruptions.”
5) Reshore or shorten your supply chain. The disruptions of COVID-19 caused supply chain bottlenecks, exposing just how overleveraged North American companies are in their off-continent sourcing relationships. Historically, organizations saved money by focusing solely on unit cost, which reduces carrying costs and depletes inventories. They have focused on lean inventory practices and have allowed for just-in-time deliveries. “To be better prepared for disruptions like we experienced with COVID-19,” ENERGY Transportation Group’s Jason Ickert tells FreightWaves, “businesses must rebalance inventories somewhere between just in time and just in case.”
6) Fine-tune your business continuity plan. Rather than filing their COVID-19 response plans under “things we hope never happen again,” Spend Matters tells companies to take the lessons learned and use them to strengthen your action plan going forward. Look at your supply chain through the lens of these three priorities:
- How are you going to ensure continuity of production and fulfillment when faced with supply and demand issues? Do you have an alternate supplier base standing by?
- Are you in a good position to maintain the flow of information? Are you embracing digital channels, collaboration technologies, and paperless workflows?
- How do you foster employee health and well-being? Are there redundancies in place to keep the business running when labor is in short supply? Can you deliver contactless service?
7) Work with experienced, reliable logistics partners. If there’s one thing all companies learned in 2020, it’s that you can’t do it all, and you need strong partners and support structures around you. This is particularly true in the logistics realm, where the right partner can help alleviate the stress of having to manage multifaceted supply chains and let you focus on what you do best: running your business.
The Adaptable, Agile Supply Chain of the Future
In March of 2020, COVID-19 unleashed a global supply chain crisis across many organizations, “stemming from a lack of understanding and flexibility of the multiple layers of their global supply chains and a lack of diversification in their sourcing strategies,” Global law firm Baker & McKenzie states. As organizations work to overcome these obstacles, the resolutions outlined in this article can help shape those plans and work toward a successful future.