The manufacturing and logistics industries have faced complex and rapidly changing conditions during the COVID-19 pandemic. Businesses in the U.S. found themselves in uncharted territory when the outbreak hit in early 2020. Supply lines became strained, as businesses and healthcare providers scrambled to deliver critical supplies such as personal protective equipment (PPE).
Nine months later, manufacturing and logistics companies are still striving to overcome COVID-19 logistical hurdles, while also keeping workers safe. Even now, the freight industry is preparing to deliver 9 million Pfizer and Moderna vaccines each day in refrigerated vehicles. To address safety challenges, and limit in-person contact as much as possible, manufacturing and logistics leaders must prioritize digital transformation in the supply chain. The top priority for executives is protecting employees’ health and safety, while continuing to operate and deliver goods on schedule. Technology plays a significant role in achieving this goal, and overcoming disruptions caused by the virus.
Mandated shutdowns and new workplace safety requirements caused huge shipping delays and major supply shortages. According to data from World CC (formerly IACCM), 59% of businesses were disrupted by supply-chain issues. In addition, the percentage of companies suffering moderate to severe impacts on contract performance jumped from 37% to 60% in the two weeks at the beginning of the pandemic.
One of the main challenges that logistics providers face during the transition to remote work is managing hundreds of thousands of digital contracts. Large supply-chain companies use various solutions to manage more than 100,000 documents and contracts, covering decades of work. Companies must ensure that all contracts are fulfilled, while protecting themselves from legal and regulatory issues.
To aid the transition to remote work, contract lifecycle management (CLM) platforms have become a critical tool for digitizing contracts across supply-chain organizations. CLM ensures that all vendor information resides in one centralized source of truth. Furthermore, CLM systems automate workflows and track contract expirations and renewals, so organizations can speed up the contract-approval process and maximize revenue.
According to a survey by Oxford Economics, automating routine tasks like paperwork and contract management is a top goal for executives in the supply chain. At a time when business leaders are looking to streamline operations and reduce costs, a CLM platform may provide the highest return on investment for automation in the supply chain. For example, CLM has enabled one of the largest U.S. trucking companies to oversee a huge volume of changes to suppliers’ terms related to the impact of COVID-19. By adopting an automated CLM system, supply-chain solution providers can more efficiently manage matters such as renewal dates, named counterparties, indemnity, and cargo terms.
Beyond efficiency and easier access to important documents, automated CLM helps organizations with contract visibility and accountability. It stores contracts and records in the cloud so that they can be accessed securely from anywhere when needed. CLM increases transparency across the organization, and enables employees to securely share and negotiate digital documents in real time. This streamlines sales cycles while drastically reducing compliance risk. For example, automated CLM can flag if a shipment is going to be delayed, when contract terms state that it must be delivered by a certain date, or when the supplier is financially liable. That way, the supplier can expedite the delivery to make the deadline, or at least notify the other party that the goods will be delivered late.
In response to the pandemic, manufacturers have demanded greater visibility into the supply chains of their suppliers. Innovation has accelerated throughout each step in the supply chain because of the challenges posed by COVID-19. More than ever, automation is being applied across many aspects of the supply chain to run more autonomously. CLM remains a key part of the supply chain’s digital evolution by streamlining contractual processes.
As COVID-19 vaccine distribution begins, the supply chain is being tested once again. With the right technology and CLM tools to track shipments, monitor truck temperatures, and manage millions of deliveries, freight companies will be able to effectively deliver vaccines across the entire country.
With CLM, supply-chain leaders have greater flexibility to review and approve contracts from any location, which speeds up processing time and keeps the supply chain moving forward during these tumultuous times. But the search for capable solutions can be a massive undertaking. Supply-chain providers interested in automated CLM should begin their search with a third-party software research firm, preferably based on real customer experiences. These sources provide real information, not marketing speak, on both capabilities and customer experience, which supply-chain leaders can use to zero in on the right CLM provider.
Colin Earl is chief technology officer of Agiloft.