• 29-03-2021

Supply Chain Resilience

Supply chain disruption has many sources: tariffs and trade disputes, natural disasters, pandemics, economic uncertainty, and cybersecurity attacks. Separately disruptions has its nuances, so it’s challenging to plan a precise response to each one. The goal is to build a supply chain that can stretch and recover from the inevitable disruptions from the full host of threats.

Shippers must be able to respond and adapt as quickly as possible to known and unknown risks. Embracing technology is part of that solution. It also takes flexible and redundant suppliers, systems, and talent to create an organization that survives and thrives while others struggle.

In 2020 companies across virtually every industry faced supply chain disruption due to COVID-19. The rapid shift from retail to online purchasing for staples and the surge for protective equipment. As well as unanticipated products like bread makers and home-schooling items, left many retailers flatfooted.

COVID-19 triggered an unprecedented surge in panic buying of food, beverages, hand sanitizer, toilet paper, and other essentials. The demand caught off-guard those retailers and suppliers who relied on just-in-time inventory practices. Manufacturing and supply chains couldn’t ramp up fast enough.

Directing the efforts of suppliers, manufacturers, truck drivers, warehouses, retail employees, and other critical links in the supply chain was no small feat.

Inventory management software is an important solution. To help maintain the right inventory levels, manufacturers can use real-time tracking throughout the whole production process. Through serialized barcodes, it’s possible to see the location and quantity of goods. The tracking software can provide precise updates of raw materials as well as work-in-progress and finished products.

Food supplies were hit by plant shutdowns to ensure worker safety before re-opening, on a limited basis in some cases. Closures of schools, universities, entertainment venues, and other non-commercial food locations shifted demand and supply chains. Wholesale food distributors and producers had to figure out how to sell directly to the public. Broadline food distributors learned how to price restaurant-quality meat in family-sized packages and coordinate curbside pickup. In response, food and beverage producers turned to third-party partners to leverage their expertise, technology, and services. New technology replaces paper tracking for food traceability, particularly for refrigerated foods like meat and processed agricultural products. These systems can help ensure quality and support recalls or other actions when necessary.

Driving much of the disruption was the fact that COVID-19 changed what consumers purchased and how they purchased it. Ecommerce order volumes surged for household staples and quarantine-related items. Overall, U.S. consumers spent $861 billion online in 2020, a jump of 44% over the previous year. More consumers purchased bigger, bulkier items – furniture, exercise equipment, etc. – online, which contributed to overwhelmed parcel shipping networks.