The coronavirus pandemic threatens to wipe out years of hard work put into supply-chain planning. Processes that were running smoothly and effectively just months ago now require reengineering, and we're learning a hard lesson: Keeping our supply chains safe is just as important as keeping them lean.
But that’s walking a fine line. While buffers may keep you safe, too many redundancies put you out of business before the next crisis arrives. We need high-performance supply chains that are cost-effective, flexible to scale up or down, and agile to respond swiftly to shocks.
The New Normal
In BCI’s 2018 report, 56% of respondents said that they had suffered a supply-chain disruption during the past 12 months. Therefore, COVID-19 outbreak has only added an additional layer of uncertainty and exposed supply chains to a new reality which many expect to accept — at least to a certain extent — as the new normal.
What can be expected going forward for the world of supply chains?
In short, high volatility, supplier shifts, demand changes and a high level of uncertainty are all factors that are expected to persist in the post COVID-19 era. So, how can we turn this into an advantage?
Three Opportunities for Competitive Advantage
Today’s decisions will have long-term ramifications on the performance of your supply chain, and, thereby the success of your business. How can we leverage the necessities of today for long-term benefits? Three focus areas stick out where the changes made to manage the current crisis today will durably improve supply-chain performance.
1. A tech-savvy remote working culture. During COVID-19, the safest mode of work is from home. With technology, at least a part of the workforce can continue to work during the crisis.
Just like the internet made it happen for the software industry, the internet of things (IoT) can make it happen for logistics and supply chain. With connected computing devices, mechanical and digital machines generate and transfer location and condition data over networks without human intervention in the chain of custody.
While not every job can be performed by machines, it is becoming increasingly feasible to automate repetitive work processes with technologies like artificial intelligence (AI) and robotic process automation (RPA). Mundane tasks like inventory cycle counts and cold chain integrity inspection or verification and be automated. Remote monitoring eliminates the need for people to perform mundane tasks.
2. Accelerated planning through supply-chain signals. Planning cycles of 13 weeks are not of much help during highly volatile times. Reducing this to a horizon of 10-15 days requires real-time and reliable data of supply and demand.
A well-managed inventory monitoring system will help you keep track of live sales and consumption data such as sales velocity to replenish in a timely manner. Using beacons equipped with Bluetooth Low Energy (BLE) or with direct-to-cloud sensors communicating over Nb-IoT, Sigfox, CAT-M or GSM, manufacturers, retailers, and distributors can keep track of live inventory at warehouses and points of sale or inventory in transit to accelerate demand planning.
3. Instant decision making with live data. Your goods shipped in dry ice could be reaching O. R. Tambo International Airport in Kempton Park, which shares its administrative boundaries with South Africa's largest city Johannesburg on time for onforwarding to Namibia, but the government may have restrictions on what they list as essential items. This might force you to re-route the container through another airport or a different longer lane that allows these items to eventually reach Namibia.
The key to cold chain excellence is the use of a cold chain monitoring system that not only provides temperature logs for compliance, but also monitors your shipment’s journey from the first mile until the last mile in real time to drive efficiency.
Bluetooth-enabled beacons with live gateways allow monitoring of live location and temperature at the package level. This ensures that the shipper knows whether the shipment needs to be repackaged or will make it in perfect conditions to the destination — enabling decision-making to avert disruption.
Wolfgang Lehmacher is a supply-chain and technology strategist, and Sanjay Sharma is CEO, at Roambee.
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