What pandemic-era adjustment will have the greatest supply chain impact?
The acceleration of digital twins. The ability to digitally model a company’s manufacturing and distribution network will allow it to quickly assess the impact of large and small disruptions and take appropriate actions.
Industry Thought Leader
The use of data analytics to help suppliers really understand consumer behavior. Suppliers decided to eliminate or stop manufacturing slow-moving SKUs in an effort to focus on consumer needs.
EVP, Strategy and Business Development
RJW Logistics Group
The supply chain is demanding comprehensive, market-based data. Innovative transportation technologies are emerging, providing a data-driven perspective to strategic decisions. It is an exciting time as leaders find a better way to reduce costs, establish stable networks, and ensure the efficient movement of goods.
—Jenny Vander Zanden
Chief Operating Officer
A company’s digital toolbox will have the greatest impact on supply chain operations. Be it advanced analytics or visibility software, organizations will continue to embrace and use data to avoid risk and ensure business continuity. This digital-first mindset will influence key decisions.
Solutions & Innovation Director
Diversify your supply chain. The biggest lesson from the pandemic is the urgent need to improve supply chain resiliency to mitigate business risks. Merchants should seek to diversify supply sources and seek partners that offer solutions to reduce reliance on single supply lines and that help navigate risks in the new model.
Diversification is key moving forward. The pandemic underscored: 1) the value of building relationships with several ocean carriers, trucking, and warehouse partners, 2) the necessity of establishing strength in multiple markets and 3) the importance of incorporating various options into your transport strategy, ranging from charters to traditional ocean to air.
—Michael Van Hagen
Senior VP, Supply Chain
Vendor diversification. During the height of the pandemic, we saw many of the major carriers decide they were at capacity—and suddenly would not be picking up orders from several businesses. This taught many a tough lesson in the need for vendor diversification. I believe this lesson has been learned and very few businesses will depend solely on one provider any more.
Co-founder and CEO
Product visibility technologies that organizations can utilize to monitor the flow and consumption of their products at every step of the supply chain. Product visibility programs and artificial intelligence can provide realistic data-driven projections to help minimize the peaks and dips of product shortages.
Owner and Founder
Veterans Logistics Group
The move away from just-in-time (JIT) operations, which for decades enabled organizations to run on a nearly made-to-order process. Manufacturers are now implementing a just-in-case (JIC) model in which supplies are stockpiled “just in case” they are needed at a later date. While JIC is more expensive and requires larger warehouses with greater storage space, it provides a cushion of supplies during black swan events.
President, Manufacturing Division
Investments in technology to connect all nodes of the supply chain and increase visibility will continue to accelerate and transform operations. With heavy reliance on third-party logistics providers, shippers and carriers will adopt emerging technologies to improve contract performance.
Senior Vice President
Many retailers finally embraced a true omnichannel customer experience. To do that, they had to evaluate and innovate their systems to support today’s “shop anywhere” culture. Consumers have raised the bar on how they shop; retailers responded by designing a seamless omnichannel experience.
New e-commerce models and more customer-centric supply chains. Companies will need to locate their suppliers closer to where their customers are located and bolster their transportation networks to increase speed to market.
Security and Resilience
Technology that makes it easier to conduct business from anywhere, at any time. From moving operations to the cloud to adopting self-service solutions so customers can manage their own shipments online, these innovations are making businesses more resilient.
The increased digitization of driver check ins and outs is here to stay. The need to limit face-to-face interactions between drivers and dock workers helped to drive a long-term efficiency gain.
Chief Solutions Officer
The flexibility importers have built into their supply chains will last post-pandemic. The increased demand for crossdocking at port markets will also live on—steamship lines have found a recipe for profit that currently limits or makes inland point intermodal shipments more costly.
VP, Warehousing & Distribution
World Distribution Services
Contingency planning. When thinking about your supply chain operations, get creative. Have a Plan B and a Plan C. Consider the disruption effects and think about the impacts on cost, revenue, and clients. Consider pivoting from fringe market products and focus on your core.
Boxzooka Fulfillment & Global Ecommerce
The shift in primary customer decision criteria from price to more focus on service and capacity. Customers still want competitive pricing, but now they diversify their carriers, are more willing to use 3PLs and NVOs, and more open to brokerage to ensure capacity.
Executive VP, Commercial & Logistics
Supply chain success depends on flexibility—the pandemic made that clear. This focus is driving technology adoption, as merchants demand more visibility and orchestration. Relying on technology enables quicker pivots when disruption inevitably occurs—shifting inventory to new cities, leveraging new ports, or redirecting orders to another warehouse.
Ware2Go, a UPS Company
Companies realized the importance of getting the supply chain right. Companies cannot afford to run on autopilot anymore and are now proactively implementing solutions to stay ahead of future disruptors. This has also led to another significant pivot—the use of data and automation including artificial intelligence to support rapid decision making.
Operations Transformation Practice Leader
Companies want to have more control over their products and are creating their own fleets to support their business needs. Keep pricing nimble (quick and easy to revise when needed), market-based, directional, and competitive. Be open to diversifying your solutions and thinking outside the box to service shipments.
The integration of data analytics into supply chain operations. Supply chains need to be managed through real-time insights, which are invaluable in predicting, minimizing, and preventing delays and shortages.
EVP, Global Solutions and Partners
The need for manufacturers and sellers to accurately and creatively manage inventory is more crucial than ever before. Companies are leveraging real-time, tech-enabled platforms to manage most aspects of their business, including sourcing, procurement, inbound and outbound shipments, trucking, and more. Everyone is looking towards new technologies to manage more of their business.
As an alternative approach to the just-in-time strategy, multi-sourcing core product components and viable substitutions is known to provide its own cost advantages and quality improvements. In the pandemic era, incorporating this method to create more innovative, hybrid procurement models has not only helped companies to reduce the likelihood of product shortages—it’s enabled them to realize dramatic and enduring impact on revenue contributions as well.
President & CEO
Companies now understand automation is a necessity, not a nice to have. The need to reduce the dependency on human labor is required for companies to remain competitive and profitable. The pandemic accelerated the shift to e-commerce in all categories. This means a high number of orders, more SKUs at each facility, more stress on the freight carriers, etc. The supply chain is quickly adapting to this change, but will be playing catch up for years.
Essential workers now need to be treated as such. During the pandemic, supply chain employees worked long hours, risked exposure to COVID, and coped with stressful work conditions. Now, employees are demanding better conditions, higher pay and benefits—and this trend will continue.
Senior Director, Global Logistics Business
A more rapid adoption of new technology, data, and robotic automation in response to labor shortages. The shift was less focused on ROI like in the past, but instead to supplement human resources and meet demand. This pivot will have one of the greatest long-term impacts on supply chain operations to help recruit, engage, and retain the next-generation workforce, improve the employee experience, and ultimately best meet service demands.
EVP & COO
GEODIS in Americas
The explosion in cloud computing and access to AI/ML innovations will enable teams to accelerate the journey to fully automated and predictive operations. The pivot to a remote workforce will broaden the pool of skilled developers ready to instrument the future state. Experienced professionals will be left focusing on innovating within the business.
Principal Solutions Consultant
The shift to reshoring and the focus on vendor management solutions to handle dynamic sourcing strategies will have a long-term impact on supply chain operations. The pandemic brought wave after wave of disruptions that impacted every aspect of global supply chains. In response, the focus has pivoted from rigidly structured lowest cost supply chains to agile and resilient supply chain designs.
Two things stand out. The first being the ability to adapt to work from anywhere. This flexibility allows less impact to the supply chain during disruptive events. Consumer behavior has also drastically changed, requiring a new type of supply chain which supports online shopping and grocery pick up.
RJW Logistics Group
The value of digitization became well understood during the pandemic. Companies that were further along their digitization journey were able to quickly adjust their operating models to the restrictions brought on by the pandemic. The resulting improvements in agility, productivity and customer experience ensure that digitization’s impact will be long-lasting.
EVP of Industry and Services
Moving forward, automation will continue to help organizations gain efficiencies and fill gaps when short staffed as well as support growth opportunities when demand is high. It’s imperative to keep goods moving safely and compliantly. Labor shortages, supply chain disruptions, and e-commerce growth continue to drive and accelerate the adoption of supply chain automation.
VP of Software & Customer Success
Supply chain managers can no longer rely on historical data or manual processes from the pre-pandemic era. They now must take an AI-driven, agile approach to respond to dynamic changes in demand signals, as well as fast-changing raw material or ingredient availability, to optimize in real time.
Senior Vice President Product Management, Supply Chain Solutions
Supplier risk management will be a key function of business continuity. Supply continuity and managing organizational risk up the supply chain will benefit commercial, operational and sustainability goals. To effectively manage customer risk, we must work beyond our direct operations, creating more value and stronger relationships with customers and suppliers.
EVP—Supply Chain & Operations
Since the pandemic, there’s been an emphasis on innovations that provide greater visibility into when and where shipments get delayed or stuck. ePOD mobile applications have been a game changer, combining digital documentation and GPS information with multiple data points collected through OCR and barcode scanning on any device.
CEO and Co-founder
During the pandemic, it became critical to use innovative tools, like location intelligence, to keep supply chains moving amid many challenges. Location analytics increases visibility in the supply chain and enables companies to identify and react to issues faster, so this will undoubtedly continue to be essential moving forward.
Founder and CEO
Since the pandemic, companies have seen a large shift to e-commerce fulfillment, while also facing an ongoing labor shortage. To meet these demands, the implementation of automation is not just a necessity now, but also for supply chains moving in the future.
Regional Account Manager
The pandemic accelerated technology adoption across the supply chain. From connecting our workforce as we adapted to flexible work-from-home schedules, to steering more carriers and shippers toward utilizing portals and other digital tools to streamline operations (improving efficiency). The short-term impact was huge, and it will increase over the long-term.
Vice President, Data Science
The pandemic laid bare the unique strengths and weaknesses of the supply chains of many companies. When the chips were down, providers who truly embraced collaboration and customer-centric problem-solving differentiated themselves. I expect this pivot toward tech-enabled, customized solutions at scale to be a lasting feature of the supply chain.
Supplier diversification is not just a trend. It’s a necessity. Pre-pandemic, businesses consolidated suppliers hoping to reduce costs and simplify supplier management. As suppliers vanished during the pandemic, consolidation continued and risk was magnified. Businesses need to pivot to more diverse supplier networks, mitigating risk, building resiliency, and ultimately providing more flexibility in their supply chain.
SVP and Head of Marketing & Solutions
SAP Business Network
Taking ownership of your own destiny. When companies were caught exposed and unable to respond quickly to disruptions, the smart companies took the reins and moved away from being so reliant on others for inventory and cost control. They turned inward and addressed their own shortcomings with better technology, processes, and partnerships.
Seasonally adjusted first quarter e-commerce retail sales increased 55.9% and 81.5% respectively from the same periods in 2020 and 2019 and helped transform the way consumers shop by providing an additional channel to shop from. For retailers, the connection between online and physical store has resulted in efficiencies and mitigated supply chain risks.
Chief Strategy Officer
The rapid movement towards sensor-driven transactions such as RFID and the adoption of robotics will have the greatest long-term impact on supply chain operations. Organizations are accelerating modernization efforts in order to combat labor shortages and provide technology that attracts, retains, and empowers workers in new ways.
Industry Principal, Manufacturing, Transportation and Logistics
Have a great answer to a good question?
Be sure to participate next month. We want to know:
Has the pandemic accelerated logistics outsourcing? Why or why not?
We’ll publish some answers. Tell us at [email protected] or tweet us @ILMagazine #ILgoodquestion.