With the advent of the ongoing pandemic prolonging and fears regarding a second wave of the virus in the fall, there is a lot of uncertainty about what the future might look like. Some anticipate that the supply chain management methods and practices that had become standardized in the global economy may have changed forever. The pandemic has revealed the fragilities in the system. There may be a drastic change in the near future when it comes to sourcing goods and inventory management.
The system in place encourages a very end-to-end and tight shipment delivery where a low inventory-to-sales ratio is essential to maintaining low costs and high efficiency. A smart planning strategy is required to avoid the bottleneck issues faced in the immediate aftermath of the outbreak.
Organizations are now considering surplus inventory supply and better network integrity to offset future crunches. Another arm of this idea extends to the inventory-to-sales and maintaining a higher ratio. This, along with a more local presence with several suppliers closer to big markets would adequately protect the businesses involved while also ensuring continuity in case of a prolonged pandemic.
The urgent need for a smart and strategic response to the unique challenge that the pandemic has thrown at businesses might have been just what was needed for the global supply chain in need of correction. We might see a sped-up adoption of Digital Supply Networks while in the short term, revamping of the supply chain model may be implemented.
To further elaborate on the measures that organizations can take to respond to COVID-19, let us take a step-by-step look:
End-to-End Stock Visibility
When it comes to immediate changes, step 1 would be improving the end-to-end visibility of the status of your inventory. This means that all the goods have to be trackable right from the supply location to the supply shipment. It will not only help predict supply shortages but also give enough of an advance warning to businesses to be prepared for such a shortage. This means that organizations can work out solutions to supply tightening and plan for control of the demand pressures.
Step 2 of this visibility process is to ensure that key suppliers are monitored via digital supply chain connectivity. Building data bank and management access dashboards will supplement decisions that need to be taken. This will also mean hiring and empowering supply chain experts who can maximize performance with quick on-the-go decision-making to counter disruptions in the future. In short, digitized supply chains can not only provide transparency but also ensure the end-to-end stock visibility that is going to become quite critical.
Complex Supplier Monitoring
Complex supplier monitoring builds on the idea of stock visibility by ensuring that there are systems in place to track the entire supply. Suppliers may usually share details regarding shipment only after products have been loaded up. Maintaining a complex monitoring model would require start-to-finish tracking of supply.
This means suppliers would have to share details like production order fulfillment capability and adaptability to shift orders in case of emergencies like the one faced currently. Shortages due to unforeseen circumstances and their repercussions will have to be disclosed.
Several supply networks are dependent on a complex supply network and providing end-to-end-stock visibility through the regular methods might take too long so a digital approach to increase the visibility of supplier networks via digital methods will be key.
Process Automation
Simply put automation is “The creation of technology and its application in order to control and monitor the production and delivery of various goods and services.” The entire system had received a push due to COVID-19 to undergo a drastic upgrade and this includes process automation.
Organizations that were once considering supply chain automation in the near future, have now started to consider making it a possibility in the next few months in a much more flexible fashion due to the need to do it on a scale. The survival, and indeed thriving, of several supply chains, depend on implementing automation.
Analytics and AI
They say information is the future, and the future is here. When businesses big and small study the overall impact of the pandemic, there will be massive amounts of data to process. This will require a qualitative and qualitative analysis of the entire supply chain system.
This is where the use of Artificial Intelligence and the use of big data analysis will come into play. Analytics can help give organizations the kind of big-picture insight which would otherwise not be possible looking at smaller sections of the supply chain. A huge amount of data collection and processing would require the pooling of resources by entire sectors of the economy. And processing such large quantities of data would require AI technology.
The big payoff would be that the analytics would provide a roadmap of the future and help organizations stay ahead of the curve by predicting future trends and helping push the entire system into a lower risk and efficient supply chain management.