The supply chain is at the core of many organisation’s business operations. From start to finish, it is closely linked with enhancing the experience for customers (and employees) and increasing service efficiencies. The global pandemic this year has certainly brought to light how important adaptability is. Many supply chains have been stretched or slowed, forcing businesses to revaluate how they operate.
Coronavirus has disrupted supply networks, forcing new ways of working to be thought out rapidly. However, there’s the opportunity here to build a supply chain that is more resilient, flexible and scalable. With the chance to review business operations in preparation for the future to ensure resiliency. This article discusses the key areas operations managers could tackle to build a better supply chain for the future, plus technology recommendations that could help them get there.
Supply Chains Pushed to the Limit
The international response to the pandemic has had a significant impact on supply chains in pretty much every industry. From supermarkets having to handle volatile demand caused by panic buying to pubs, restaurants and coffee shops having to deal with a severely reduced demand caused by social distancing, curfews and now the tiered lockdown system. There are disruptions at all ends of the scale.
It’s not just changing consumer behaviour brought about by COVID-19 that businesses have had to contend with either. There is also the availability of labour, continuity of supply from vital suppliers and restrictions on movement. These challenges spelled disaster for unprepared supermarkets back in March and April when consumers were panic buying key items like pasta, bread and loo rolls! Leaving the shelves stripped bare in most shops for quite some time.
94% of Fortune 1000 companies are seeing supply chain disruptions from COVID-19
75% of companies have had negative or strongly negative impacts on their businesses
55% of companies plan to downgrade their growth outlooks (or have already done so)
Lean vs Agile Supply Chains
We’ve spoken before about how shifting business operations to being leaner will help businesses in the long run. The goal of lean operations is to deliver the best possible customer experience of your goods and services, in the most efficient manner, thus minimising waste or getting rid of any area that doesn’t add value to the customer at the end. A key benefit to operating in this way is driving costs down and making processes less clunky.
Agile supply chains on the other hand are designed to be highly flexible, enabling organisations to quickly adapt to evolving situations (like a global pandemic!). As a result, the supply chain is able to quickly respond to sudden changes with the required speed and flexibility.
The best approach to apply depends on which end of the scale of disruption the organisation is at. For example, travel companies who have been hit hard by scarcity would do well to follow a lean approach and look where they could eliminate waste. Supermarkets on the other hand need to follow an agile approach to be able to keep up with high demand.
Responding to Supply Chain Disruption
If you want to stay ahead of uncertainty during this challenging environment, making changes to your supply chain is a good start. We’ve got five holistic areas that are vital to consider, sprinkled with some clever supply chain management technology suggestions.
1. Reduce the Need for Human Intervention
With social distancing, many operations key to the supply chain like manufacturing plants, factories and distribution centres are operating at a severely reduced capacity. This of course slows the supply chain down from raw materials to services and products deliverable to consumers.
Although there are some areas of the business for which humans simply cannot be substituted, it’s vital that you look at areas of your supply chain that may be helped by business process automation.
As we outlined at our Convergence Summit this month, automation isn’t here to replace humans, but to help make their lives easier! You could take for example, your interactions with suppliers. Tools such as INBOX can be utilised to organise all incoming digital interactions from them. Organising by context, with smart tagging and search filters to help prioritise and categorise each interaction. This type of automation saves on the administrative work your procurement and operations staff need to do, enabling them to focus on higher-value areas or areas for which humans are essential.
2. Managing Data
Data has been at the centre of business for a while now. As we advance with technology, it will continue to be key for all business activities and in particular operating our supply chains with increased efficiency.
It’s crucial for supply chains to bridge the data gap in the multiple systems utilised in order to create end-to-end data transparency. There are solutions that could ensure a single point of data entry or update for the entire organisation. Updating not just supply software, but other software utilised for customer relationship management or orders.
Technology like this helps to reduce errors across the supply chain and provides employees with a single source of truth for analysis and planning. It could help prevent mistakes when ordering raw materials for instance or be teamed with other automations to notify suppliers when your stock drops below a certain level.
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3. Switch out Legacy IT OR Overlay it
There’s no doubt about it, legacy systems are expensive. They also tend to work against you when you’re trying to optimise the efficiencies of your supply chain. But we understand sometimes you can’t just rip out your legacy systems and put in something shiny and new.
Have you ever through about overlaying it though? You could decide to put all or some of your legacy systems into the cloud or implement a simple piece of technology that works to connect all your disparate systems and data.
When the pandemic first struck we saw a huge increase in the number of people searching for VoIP in order to move their communications to the cloud. Many chose to retain the system they had but modernise it by moving to the cloud to allow for remote working.
4. Knowing Where to Trim the Fat
Very much a characteristic of lean supply chains, trimming the fat will be a vital activity for surviving supply chain disruption. You don’t want unnecessary costs or processes bogging you down, time to eliminate what you don’t need. This could be something as simple as a product or service that hasn’t been profitable enough for quite some time or something more radical. Or again, automation as a key strategy for lean operation could be utilised to automatically notify suppliers when your stock is getting below a desired threshold.
Not everywhere needs the fat trimming though. For supermarkets who were hit with panic buying during the first lockdown, having an abundance of quick and accessible supply is crucial. It’s been a record-breaking year for new leases signed on warehouses, with a forecasted 40 million square feet contracted (Wired). This shows the move to a ‘just in case’ supply chain that’s more agile and able to respond to the demand should it rise steeply again.
5. Adjusting the Customer Experience
The end (product or service delivery to the end customer) of many supply chains has had to change drastically due to coronavirus. Take pubs operating through the lockdown for instance, many had never thought about home delivery. Yet they have had to adapt their supply chain to meet the customer right at their front door.
It’s raised the importance of having joined-up website or application journeys where human interaction is minimal. Restaurants for example have had to implement applications that mean customers can order from their smartphones. The only human-to-human interaction needed is delivery of the ordered food and drink to the customer’s table.
Build a Future Proof Supply Chain
Lots of aspects have changed for this year and with the outlook, things are likely to get more challenging. The best strategy for your operations depends on how you’ve been disrupted.
Technology will become key in shaping the adoption of lean or agile supply chains. Helping to connect your disparate teams, automate processes and maximise customer experience efficiency.
Discover more about how we can help optimise your remote workforce, shift to leaner or agile ways or working and improve your customer experience. Access content from our Convergence Summit 2020 here!