Post-COVID Supply Chain Trends
These are unprecedented times. COVID-19 has created uncertainty, risk, and destabilization of the marketplace. However, there may be a silver lining to how the pandemic will affect change. Already we have experienced many workplace safety improvements and developed new processes and policies aimed at protecting employees.
You may be surprised to discover how much manual processing still exists in supply chain today. Getting items from point A to B involves movement across many people in many places. This physical exchange presents enormous challenges for the industry in a post-COVID environment.
Looking forward, here are a few supply chain trends that will likely emerge from recent events.
For decades, U.S. companies were offshoring their manufacturing to countries with less restrictions and cheaper labor. But now manufacturing overseas presents risks to companies; many of which are sure to have a severe impact to the bottom line. According to a Thomas survey of 878 North American manufacturers, 64% reported they were likely to bring production and sourcing back to North America. The driver of this was due to a disruption in obtaining parts from oversea suppliers. Today, many companies are pulling out of these countries to resume production closer to home.
Automation Gains Speed
Robots cannot catch COVID-19. The supply chain was moving toward automating many processes before the pandemic and now the motivation to deploy robots is at an all-time high. Automation reduces person-to-person contact and increases efficiency and throughput. There’s virtually no downside to this trend other than cost, which could be under what a company pays a human to do the same task. Add in artificial intelligence, machine learning and vision recognition to an automated process, and it will have a significant impact to supply chain over the next few decades.
Retail Shifts to Online for Good
When the government forced many retailers to shut down, people turned to ecommerce. In doing so, many people are converted to online shopping as a primary method of receiving goods. In a normal business climate, where one-day or two-day shipping returns, this will become the default purchasing method. Small to medium-sized manufacturers without an online presence will need to get one in order to compete. 3PLs will help them design a fulfillment strategy. It’s only a matter of time before brick-and-mortar retail dissipates.
Visible, Real-time Data is King
If the pandemic taught us anything it’s that data is the most valuable tool in society. This goes far beyond the supply chain industry. We used data to track people’s movement, PPE supplies, cases, and test results. Additionally, there’s a clear benefit to real-time data in allowing us to make decisions and forecast. Suppliers will rely on data more than ever to mitigate risk and avoid disruptions in their supply chain. Data is our guiding light.
Digitization of the Supply Chain
While we’ve made great strides to digitize with warehouse and transportation management software, EDI connections, enterprise resource planning systems, and barcode systems, there is still a long way to go. Bills of lading, warehouse receipts, pick orders, and labels are largely exchanged in hard copy form. The outdated practice is related to the volume of independent management systems and the number of hands that product information must go through to move through the supply chain. With paper being accepted by everyone it becomes a challenge to digitize this process. Hopefully coronavirus will be the catalyst to adopting a universal block chain in order to eradicate paper from the industry.
If you are experiencing COVID-related disruptions in your supply chain, Evans Distributions Systems can help. Give us a call at 1-800-OK-EVANS or request a quote.