No one would have imagined that the year 2020 would completely reshape how nearly every industry operates. From public transportation to food service and hospitality sectors, the social and economic impact of Covid-19, also known as the coronavirus, has been swift and unapologetic.
Organizations that have felt the adverse side effects of coronavirus more than many others are those currently in manufacturing and supply chain management. However, as disruptive as Covid-19 has been to the operational and logistics needs of numerous businesses, the world has started to recognize and accept the need for better supply chain efficiencies and contingencies.
Here are three major supply chain management lessons learned since the Covid-19 outbreak.
Digital Transformations are Essential
An important lesson learned by many organizations maintaining their supply chain in the wake of coronavirus is that many manufacturing and logistics processes remain incredibly manual. This has led to a necessity for modern-day manufacturers, third-party logistics organizations, and shipping companies to heavily invest in their digital transformation strategies.
Thanks to the development of newer, more innovative tools and solutions, many supply chain management processes can be automated and improved while improving supply chain transparency and optimizing production. This involves using new-age supply chain management solutions like augmented reality technology to virtually plan and optimize warehousing and supply transportation procedures.
Remote Working Can Lead to Better Sustainability
The recent Covid-19 outbreak has left many supply chain managers focusing on their bottom lines and looking for ways to cut costs. However, many organizations are quickly realizing that enabling a remote working environment is now creating new opportunities for better sustainability, and more and more shoppers all the time are looking to purchase sustainable brands.
Allowing work-from-home arrangements has also led to decreased use of commercial resources and an overall reduction in fossil fuel and energy consumption. This is a significant benefit to organizations that are focused on reducing their carbon footprints, especially manufacturing and shipping companies prone to higher volumes of noise pollution and materials usage.
Maintain Larger Inventory Buffers
One of the most significant issues associated with Covid-19 restrictions on manufacturing and distribution is the lack of supply to fill the demand. When balancing the inventory needs of a business, most organizations adopt a lean strategy, minimizing the possibility of overstocking goods and maximizing their cash flow. This is especially the case during slower selling months, typically after the holiday season. Unfortunately, Covid-19 has exposed how fragile the US economy truly is and has taught supply chain managers the hard way to always be prepared for the unexpected.
While President Trump invoked the Defense Production Act (DPA), which gives the government the ability to redirect critical manufacturing resources as needed, organizations learned to adopt proactive steps to improve their onhand supply counts and minimize organizational disruption. By using advanced forecasting tools, ensuring efficient procurement of product materials, and regularly monitoring new sales trends and market needs, organizations are taking better control over their supply chain and positioning themselves for better growth and sustainability.
The year 2020 has proven to be a major wake up call for supply chain management as we know it. While Covid-19 has proven to be a significant disruption for every industry, organizations have learned valuable lessons on how to improve their processes, streamline their operations, and enhance their supply chain.