They say the most adaptable survive. Businesses and people who have been adaptable through COVID-19 and who continue to be adaptable will survive.
Supply chains will need to become more efficient and resilient in the future.
These are some changes that managers can prepare for:
The chain will be short
Up to the onset of Covid-19, businesses used manufacturers, who helped their bottom line with lowest labour and lowest manufacturing costs. This is largely why so many businesses used manufacturers in China.
These manufacturers were overseas and not locally based meaning that product and information had to cross over through borders.
When Covid-19 hit, all borders were closed, causing a total interruption in the flow of goods.
As a result, there is now a move towards having suppliers within close proximity to the business, so that meeting demand with supply, is done in real time, with far less risk.
Move away from supplier consolidation to supplier de-consolidation
Businesses would only use specific suppliers based on their reputation and efficiency. The supplier database used was consolidated. When these suppliers couldn’t supply, during Covid-19, businesses had to scramble to find alternative suppliers or suffer huge losses.
Post Covid-19 there will have been a move towards the de-consolidation of suppliers. More suppliers will be added to the database in the case of emergencies like the pandemic.
They will be automated supply chains
For supply chains to operate efficiently and effectively, they need to be automated. This is divided into factory and non-factory.
Factories need to be automated so that production processes can be optimised in ways that minimise waste and maximise yield.
Non-factory automation, and the collection of data from it, can similarly increase cost-effectiveness, efficiency and productivity. This would include information about procurement, inventory management, warehousing and transportation.
What about people?
The goal of automation is not to replace people, but to make them more effective in their jobs.
Digitisation is worthless unless data is democratised in ways that empower teams, at all levels of the organisation, to use it.
To that end companies are training their staff in new ways of working.
Covid-19 has pushed companies to implement emergency changes to their supply chain. Companies that have adapted quickly have and will survive. A new chapter is opening for more regional, resilient supply chain models.