As the COVID-19 pandemic continues to loom, it threatens to wipe out years of hard work put into supply chain planning and optimization processes and workflows. Processes that were running efficiently months ago now must be re-evaluated and re-engineered to keep them from becoming obsolete.
Through all this, organizations are learning a hard lesson: Keeping your supply chain nimble and resilient is just as important as keeping it lean and nimble. This may sound like an easy task but too many redundancies in your supply chain will put you out of business before the next crisis even arrives. Organizations need high-performing supply chains that are cost-effective, flexible to scale up or down, and agile enough to respond swiftly to shocks.
The current COVID-19 pandemic has added an additional layer of uncertainty for many supply chains and has exposed supply chains to a new normal. This is what organizations may expect in this new normal for supply chains.
- Demand may continue to be volatile. Consumers may continue to stockpile essential products, such as soap, cleaning products, and toilet paper. Since many of these products have long shelf lives, we can expect a steep fall in demand following the short-term sharp increase. How do companies plan for this?
- The supply chain partner landscape will shift. Some existing partners are beginning to crack under pressure, while new partners are emerging. Quick supplier assessment and monitoring are becoming the new supply chain management standard. What impacts does geopolitical changes have on suppliers?
- Omnichannel solutions are trending. Online services have been the winners in the COVID-19 crisis.
High volatility, supplier shifts, demand changes, and overall uncertainty are all factors that are expected to persist in the new normal post COVID-19. This shift to a new normal has been a rude wake-up call for organizations on the importance of a strong and diverse supplier network. The capability to diversify and adapt, combined with a strong partner network, establishes four supply chain lessons from this pandemic for mitigating unexpected future disruptions.
Diversification: One of the most important lessons has been to diversify the countries from which a product is sourced. China has been the center for sourcing for a worldwide market, yet it was the first hit by the COVID-19 pandemic and went into lockdown. Many retailers were impacted by relying solely on one location for supply, and faced prolonged shortages. Going forward, it will be key not only to find a broader range of products and sourcing locations, but also to identify more selling channels, such as online marketplaces.
Adaptability: The ability to quickly adapt to unexpected challenges is a vital skill for any organization, but has proven to be even more relevant today. Many retailers with strong capabilities to adapt were able to expand and capitalize on new products and selling categories that they didn’t offer pre-pandemic. Many other retailers overlooked this opportunity to adapt their supply chain and, as a result, failed to understand how to adjust to the shift in buying patterns and demands that were changing around them.
Tools: Having the right set of tools is essential. This can help save organizations time and money, allowing more to be invested into important optimizations. Certain value-added tools, such as Vanguard Predictive Planning™, enable organizations to make beneficial choices in supply and demand planning. This is particularly useful for organizations that lack the capability to assess situations quickly themselves.
Vanguard Predictive Planning™ is a state-of-the-art, market leading, native cloud platform that enables organizations to implement an Integrated Business Planning (IBP) initiative with support for all lines of business. Whether an organization is planning within one line of business, such as the supply chain, or connecting plans across all lines of business, Vanguard Predictive Planning™ is the most scalable, flexible, and user-friendly option on the market. Contact us to learn more.