The initial onset of COVID-19 was a period of significant disruption for the supply chain:
• North American companies were cut off from overseas suppliers who themselves had to grapple with their own local outbreaks.
• Many plants in various industries had to shut down production due to drops in sales, incidents of employees testing positive for the virus or simply for precautionary measures.
• Most notably, there were the dramatic spikes in demand for food, personal hygiene and anti-bacterial products. Producers, distributors and transportation providers had to go above and beyond to deliver sufficient replenishment to the marketplace.
While the supply chain has stabilized to an extent and the world is beginning a return to normalcy—or better, adapt to a new normal—the widespread challenges seen early on in the pandemic served as a wake-up call for many organizations for the need for something they have long put off: digital transformation.
As the world was thrown into major upheaval, many organizations found difficulties proactively identifying weak links in their supply chains, and reorganizing and responding accordingly to mitigate the disruption. The main reason was an ongoing reliance on manual processes, as well as disparate, fragmented systems between supply chain participants. Resulting data silos made it practically impossible to access the necessary data to take timely action.
To adapt to a post-COVID-19 world and prepare for future potential “black-swan” events, companies will need to break away from their legacy, manual processes and embrace more sophisticated, digital technologies. These are solutions that can provide the data accessibility, connectivity and visibility to optimally pivot operations as necessary in response to events or even predictions based on the leveraged data.
For example, if current sales data indicates rising demand on a specific product, you can proactively adjust production levels to ensure there is adequate supply to meet that demand, while minimizing excess based on more accurate demand forecasts. Moreover, if you see that demand is growing in specific geographic regions, you can readily allocate inventory to stores or warehouses in those areas in advance to cut down last-mile delivery time.
Ultimately, digital transformation of supply chain management is about having the nimbleness, adaptability and resilience to thrive no matter what may lie ahead for your business. The technologies worth investing in now to achieve these capabilities are:
• Blockchain: Blockchain can provide the foundational layer that digitizes and connects all data from across the supply chain. The data is immutable and transparent to all participants. It also flows in real time to support timely and proactive decision-making.
• Artificial intelligence (AI): With large volumes of data being generated and collected around the clock, finding actionable insights can be like looking for a needle in a haystack. Rather than comb through the data themselves, users can lean on AI to run predictive analytics and surface intelligent recommendations for how to best execute processes and orchestrate operations across the supply chain. Thus, in some industry circles, AI is actually referred to as “augmented” intelligence rather than artificial.
Click here to learn more about the power of AI in predictive supply chain management.
For years, companies have recognized the need for digital transformation, but kept it low on their company agendas. COVID-19 has simply accelerated the sense of urgency and pushed digital initiatives to the forefront. And despite all these discussions of a post-COVID-19 world, we can’t forget that the pandemic is far from over. As uncertainty continues to loom, especially with the flu season and winter months ahead, cases may rise and we may yet again see another wave of disruption. The digital transformation imperative is not only an investment for the future, but also the immediate needs now throughout the industry.
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