Why Supply Chains Must Evolve After COVID-19

Perspectives
Jun 11, 2020
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7 Min Read

The outbreak of the coronavirus has exposed a weakness in our supply chains.

Early on as states instituted lockdowns, closing businesses, and forcing workers remote, images of empty shelves where toilet paper, paper towels and other products had once been were plastered across newspapers and TV.

Stores instituted policies limiting the amount of paper products, hand sanitizers and facemasks customers could purchase as the prospect of weeks or months at home sent people into a panic.

The shelves empty of the necessities people needed wasn’t about hoarding, but rather, weaknesses in a supply chain struggling to adapt to a modern world.

In the wake of such a global crisis, and as businesses start to reopen, businesses and supply chain managers must evolve beyond traditional supply chain thinking to avoid a future disruption on this scale. In fact, developing new strategies to deal with disruption, rather than applying tired principles from the first industrial revolution, could be the key.

Why Traditional Supply Chain Principles Failed

The pandemic didn’t catch the supply chain off-guard. Instead, traditional fail-safes gave way to an unprecedented crisis that couldn’t be solved or eased through classic supply chain management wisdom.

For example, one hallmark of managing a multilayered supply chain is to never put your eggs in one basket. If one of your suppliers fails to deliver a product or material, you switch to another source. For example, if a natural disaster impacted one supplier, the company may need to rely more heavily on a different supplier or find a new one.

In a pandemic on this scale, there is no alternative supplier. As countries have moved through the same issues together, the supply chain grinds to a halt because we rarely experience global issues like this.

Another issue is the behemoth size of our supply chains themselves. The toilet paper shortage was a great example of how non-agile systems cannot simply adjust in time to a massive disruption because they are by nature very slow, operating on razor-thin margins with no room for error.

Contrary to internet memes, toilet paper shortages were not caused by hoarding. Instead, a carefully balanced production of home goods versus commercial goods failed in the wake of more people suddenly being at home for extended periods all at once.

There’s plenty of commercial toilet paper — those huge rolls meant to sit in office bathrooms — but production lines can’t simply switch over to produce more consumer toilet paper. That’s not how it works. By the time massive supply chains rotated production over, we’d be over the crisis anyway.

Reconsidering the Traditional Supply Chain

Linear style supply chains will soon give way to smaller, agile operations with fewer silos. These new parameters could allow quicker transitions — think the farmer who supplies restaurants now selling directly to consumers — for producers in the event of a crisis.

Digital Transformation Required

Digital transformation is not a new concept. But, companies can no longer wait years as they work on these efforts. It is evident that accelerating digital transformation efforts has become more important than ever. COVID-19 is not the first, nor will it be the last global disruption to our production. But for the first time, we may have the tools to rethink the entire system.

The move to streamlined development is a must. With COVID-19, companies went from office-based operations to remote in as little as two weeks, causing massive downtime and confusion. The answer to future disruptions is a fundamental change in mindset.

Low-code platforms could provide a massive boost to companies who need to build quick solutions in response to disruption as well as everyday operations. These platforms enable those closest to the work to rapidly develop custom and agile solutions, allowing companies to get new programs up and running quickly, insuring them against future disruptions.

As many professionals discover working from home is more productive — and companies realize they can, in fact, accommodate those remote workers (and save money on overhead costs at the same time) — it will be these agile development tools like low-code that allows companies to support this new workforce and move and respond in real-time.

COVID-19’s Supply Chain Lessons

The real lesson of this global disruption is not about being unprepared. No one was “unprepared” for the pandemic. No one could imagine a scenario in which no iteration of a preparedness plan would fail.

Businesses often have to evolve to survive. Adopting tools that remove bloat and human error and instead facilitate lean development allow for truly agile operations that will help ensure survival. Supply chain managers and businesses have been talking about digital transformation for years now, but COVID-19 finally flipped that switch.

It’s time to embrace a new way of thinking about production and use new tools like AI, computer vision, and low-code platforms to transform not just our plans but our entire approach to supply chain management. Don’t go back to the status quo.

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