The COVID-19 pandemic has already created significant disruption for organizations and society at large, and has radically changed the macroeconomic outlook for 2020. At the same time, now is the time for many companies to assess how well they are prepared to manage a crisis and what they need to do to ensure business continuity.
This is especially the case for organizations with complex supply chains, like manufacturing and retail, which face a number of major challenges:
- How can they ensure reliable replenishment?
- How much inventory needs to be stocked, and where?
- How can supplier networks be expanded and best utilized?
- What about local sourcing?
- What impact is the crisis having on demand?
- What about pricing?
These are tough questions, especially for organizations that do not have the right technology solutions to support decision-making processes.
The COVID-19 crisis has led many organizations to realize that 3rd Platform technologies are no longer a competitive advantage, but a necessary business enabler. It has also increased the need to implement technologies that support business continuity on various fronts.
Areas of Improvement
During the crisis companies will be putting on hold some IT initiatives or transferring cash and resources to collaborative applications and infrastructure support to enable new ways of working and better manage the short-term implications. Moving forward, organizations should focus on solutions that support advanced planning and mitigate the impact of similar events in the future.
Among the areas for improvement are:
- End-to-end stock visibility: Organizations need to know what they have in their warehouses, in store, what is selling at what time, and where, so they can quickly react to changing conditions and customer needs. Having unified inventory visibility across channels in a single database is crucial. This not only enables organizations to make rapid and agile replenishment and stock transfers — it also means they avoid overspend on inventory.
- Complex supplier monitoring: Understanding how suppliers’ and their subcontractors’ locations are spread out globally, and knowing which products pass through those sites, is critical to manage any disruptions. This enables organizations to quickly predict how the supply chain will be impacted over the coming weeks, giving them time to immediately execute mitigation strategies.
- Analytics and artificial intelligence: Deploying tools infused with strong analytics capabilities will enable organizations to get ahead of demand, respond to changing market conditions, improve demand forecast accuracy, and suggest better allocation and replenishment strategies. By combining internal and external data, supported by AI, applications can work on scenario analysis and “what-if” conditions, creating complex models to plot the best course of action.
- Process automation: Workflow automation leads to even faster and more agile replenishment processes. For example, systems that provide low-stock alerts can automatically order goods for a particular store quickly and cost-effectively from the right location.
How Supply Chain Management Technology Vendors Should Respond
For Supply Chain Management technology vendors, now is the time to put innovation and business process transformation at the front and center of the conversation. Customer organizations need to see how Supply Chain Management solutions can better prepare them for demand fluctuations, macroeconomic instability, and challenging conditions. Supply Chain Management can also support enterprise planning and management beyond the supply chain and create a robust but agile production model that can rise to current and future challenges.
If you want to learn more about the COVID-19 Impact on Supply Chain Management, or have any questions, please contact Edyta Kosowska , or drop your details in the form on the top right.