8 Major Supply Chain Shifts Caused by the COVID-19 Pandemic

For the first time in history, the operations of a company have become a concern for the consumer. No one ever imagined that something as basic as toilet paper would make it to the news. 2020 drew attention to the fact that our system collapsed the moment there was an unanticipated shock. While thousands of Americans were hoarding toilet papers, and pharmacies were running out of sanitizers and masks, the suppliers really wanted to support those surging demand shocks, but they were not prepared for it.

Businesses are well aware that reworking the supply chain is not a choice anymore. Here is how COVID-19 has changed our outlook of the present systems -

Focus shift from external factors to internal processes

Companies now know that external factors cannot be controlled, neither predicted. If it wasn’t clear before, COVID-19 has left no doubts about it. Our focus should be on things that we can control, our own weak spots. Find out where you need to strengthen your supply chain because when the shock comes, it breaks the weakest link first.

Efficiency vs versatility

For long businesses have been focusing on cutting costs, saving resources, utilizing maximum space. Efficiency has always been one of our managerial goals, but it severely impacted our risk absorption capacity. Now that these issues have surfaced, companies are focusing on building agile systems.

Higher transparency

There has never been a higher demand for operational transparency. Consumers need assurance that their requirements will be fulfilled, they want to know how their product will reach them. The demand for transparency is specifically high in the FMCG sector, people need their essentials.

Even stakeholders and businesses looking for merger and acquisition opportunities understand the importance of the supply chain in today’s world, and they demand transparency.

Automation

The industry had been moving towards automation for a long time. The need to cut manual labour and automating the processes has been discussed for more than a decade. But when the pandemic hit and companies struggled with finding a way to operate at 50% capacity, this shift only accelerated.

High coordination with customer service and segmentation

Whenever there is a block on timely delivery, the customer is affected directly. We need to make sure that customer touch points have a quick way to reach the operations and deliver customer messages. This helps in resolving accelerated cases on time.

Companies involved in mass production need to carefully analyze the demand and create micro-segments that need to be looked after at priority.

Higher importance on ethics check

With a push for transparency and an increase in digitization, companies are going to extreme lengths to verify their suppliers. Businesses need to make sure that the raw material that they are sourcing isn’t created by illegal means.

Focus on employee wellness

Businesses need to keep proper resources in check to help their employees at the time of need. Healthcare and sick leave policies need to be re-designed while keeping in mind the present scenario. Leadership plays an important role in keeping teams motivated during difficult circumstances.

Moving out of the house – Network building

Companies are looking at opportunities to minimize the risk by distributing it over a network to co-produce and increase flexibility. We can already see a rising demand for flexible warehousing and distribution options.

This is indeed a challenging period, and one cannot avoid making investments in resilient systems, it is up to the businesses to see how they will remodel their operational flow moving forward. It would be foolish to wait for the pandemic to pass and hope for the old normal. By that time competitors who chose to invest timely would be way ahead in the race.