How companies can use data, technology, and good supply chain visibility to navigate the uncertain waters of COVID-19.
As COVID-19 continues to take its toll on human life, workplaces, and economies around the world, companies that relied on manual processes and lacked good supply chain visibility suddenly found themselves unable to meet the demands of this “new abnormal.” Already a hot topic in most boardrooms before the pandemic, supply chain has taken a front seat in the business world’s race to fend off both the short- and long-term impacts of COVID-19.
“Despite numerous supply chain upheavals inflicted by disasters in the last decade — including the eruption of a volcano in Iceland, the Japanese earthquake and tsunami, Thailand floods, and Hurricanes Maria and Harvey — most companies still found themselves unprepared for the COVID-19 pandemic,” Harvard Business Review reports, noting that in February, 70% of companies admitted to being in “data collection and assessment,” with many manually attempting to identify which of their suppliers had a site in the specific locked-down regions of China.
This created a domino effect as the usual flow of packed containers being shipped overseas from China slowed to a stop. Goods piled up in warehouses as companies worldwide awaited their delayed shipments, and carriers saw their volumes decrease significantly. Concurrently, people around the world struggled to find essential goods that they needed. As the world’s heavily intertwined supply chains continued to feel the impacts, the situation only worsened.
What was missing in this equation was reliable, accessible data which, in turn, drives good supply chain visibility. Lacking instant access to their critical data, these and other companies thrown into the COVID maelstrom found themselves blindfolded, both operationally (i.e., goods in transit, accurate delivery schedules, etc.) and in terms of their reporting. Because (accurate?) reporting is the engine that tells organizations what’s happening in their supply chains and enables good decision-making both during and after a crisis, these information gaps have been particularly damaging.
In other words, when you’re constantly running behind the facts, it’s easy to make the wrong decisions.
Reactive Moves Don’t Work
When COVID reared its head, it threw a lot of organizations into survival mode. Most developed emergency responses in an attempt to rein in the chaos, but others viewed the pandemic as an opportunity to improve.
Where some industries may be hamstrung right now by social distancing requirements and government shutdowns—restaurants, hospitality, and the airlines to name just a few—others can use this time to retool and come back stronger. That means reinventing their supply chains, logistics, and transportation networks and making better use of technology to gain high levels of visibility across all of their critical networks.
Here’s why this is harder than it sounds:
- We live in a world where every human creates 1.7 megabytes of information per second, and where 99.5% of collected data is never used or analyzed, so the data is available somewhere—it just may not be accessible.
- Employees scrambled to find information and tracked critical data on spreadsheets and across disparate technology platforms. This siloed approach forced companies to define emergency procedures on the fly.
- With employees wasting nearly 20% of their workdays—the equivalent of one day per working week—searching for information to do their job effectively, the time lost on data searches is significant even when there isn’t a global pandemic in full force.
Already grappling with these challenges in the pre-COVID world, companies have since added massive demand fluctuations and high levels of uncertainty to their list of pain points. Lacking a solid plan of attack, many resorted to transportation mode switching and—much like the insanity of toilet paper hoarding—tried to secure more carriers in an attempt to “cover the spread,” so to speak. This lengthening out of already-unstable supply chains only exacerbated existing issues.
By consolidating data across various sources and bringing them onto a single, accessible platform that users can rely on, data-driven operational control towers help to shore up the supply chain and make it even more resilient in the future. Managers know not only what happened last week or last month, but also one hour ago. With this information at their fingertips, they can make good decisions in a fast-moving business environment where the dynamic changes on a day-to-day basis.
Shaking Off the Impacts of the Disruption
As organizations begin to shake off the impacts of the current disruption and prepare for the future, supply chain reinvention will be a key goal for many of them. They’ll not only be repairing the damage that’s been done; they’ll also be retooling for resiliency, ensuring that their supply chains and logistics processes are steeled against another COVID-like hit. Companies will also be able to:
- Maintain good visibility across their supply chain, logistics, and transportation networks, with an eye on managing incidents before they become serious events. For example, rather than having to export data from different systems and incorporate it into a single spreadsheet, users have an operational control tower that incorporates all of the activity that’s taking place and presents it in a user-friendly manner
- Have meaningful, proactive conversations with suppliers, customers, and business partners using high-tech means like chat capabilities embedded in their technology platforms (versus only picking up the phone or sending an email when there’s a problem). Having order-level information on a centralized dashboard helps support these conversations.
- Gain SKU-level visibility that allows them to drill down on detailed order levels and quickly identify shipments that include certain SKUs (versus just knowing where the shipment is in the supply chain).
- Identify specific orders and share information on those orders with customers, carriers, freight forwarders, and logistics providers to help get the right goods to the right place at the right time.
- Involve customers in the supply chain process by giving them real-time views via customer portals.
- Use performance, outbound freight, and cost dashboards to get real-time views of their supply chain operations in one place, and from a birds-eye view. If something is askew, managers can click on a pie chart and drill down into the operational data within seconds.
With more employees working remotely, the need for accessible, collaborative dashboards is more important than ever. Companies that act now, codify what they've learned during the pandemic, remove the data silos, and embrace collaboration and data-driven logistics will become leaders in the new normal.
Organizations that ignore this wakeup call and just return to “business as usual” will be caught off guard by the next disruption and wind up losing customers and feeling the impacts on their bottom lines. Those that redesign their supply chains and replace manual processes now will be well braced for whatever comes their way.