The Coronavirus disease (COVID-19) pandemic is a galvanizing event that has demonstrated the impact of supply chains as unifiers across an interconnected global ecosystem, and this impact continues to resonate. A recent Interos survey found that 98% of organizations’ supply chains were impacted by the pandemic. To continue navigating these waters successfully, end-to-end supply chain transformation will be key.
End-to-end transformation isn’t necessarily a new idea. In fact, many forward-looking companies had already made end-to-end transformation an essential priority long before supply chains were thrust into the spotlight. For these leaders, the pandemic accelerated processes already underway, providing opportunities to strengthen foundational capabilities and use shifts in customer demand to accelerate change.
Supply chain strategies should hinge on the ability to strengthen operations by ensuring safety, quality, compliance and continuous improvement; implementing advanced manufacturing and distribution technologies; advancing the impact of supplier partnerships; and scaling the use of digital. Equally, strategies call on companies to put customers first by pursuing strong segmentation and customer-driven, outside-in opportunities — in ways that enable these organizations to drive growth, innovation and partnerships aligned to changing needs.
And, these needs are changing rapidly. Consumers and patients are seeking personalized, on-demand experiences, prompting innovations such as patient-specific supply chains and personalized medicine. The healthcare industry is experiencing new channels for access to products and services, which range from e-commerce to personalized medicine. An increase in geo- and socio-instability is also leading to a need for supply chains to stay resilient and provide greater transparency and social impact.
These developments demand that businesses and their supply chains get ahead of the rate of change. But, to do so successfully, it’s essential to ensure efforts are aligned to these three actions:
1. Create an always-on, connected digital thread
Digital — which intersects all market trends and disruptors — is opening new ways of working and changing how we connect with stakeholders.
Digital connectivity plays a critical role in responsiveness to product demand.
For example, a “digital stack,” which is a layered set of capabilities that power many initiatives across the supply chain, allows for a higher level of responsiveness and transparency. Digitized processes help companies drive efficiency, uncover trends and insights that illuminate new opportunities for innovation and communicate with customers.
COVID-19 not only accelerated many organizations’ digital transformation, but also proved its worth in countless ways. Building foundational capabilities in key areas like business continuity, digital and planning has enabled companies to respond to the global pandemic, while harnessing new levels of agility to get ahead of changing needs for the future.
2. Pivot from managing risk to reimagining resilience
The global product shortages and unexpected supply chain hurdles of COVID-19 won’t be forgotten soon. While meticulous planning helped many companies overcome these issues, the experience serves as a broader call to create an even more resilient system from end-to-end.
This means using technology to spot potential problems before they materialize and predict how supply chains will manage with staffing shortages like the ones brought on by the pandemic.
Risk-simulation software helped model things such as whether factories could run at reduced capacity, or what would happen if products could not be shipped on their normal schedules. This helped maintain continuity of supply for critical products throughout the pandemic.
When engineers and scientists were unable to visit manufacturing plants due to travel restrictions, smart glass technology allowed those remote team members to fine-tune equipment by seeing exactly what a line worker was seeing. Track-and-trace sensors that were included with shipments informed supply chain managers of where their shipments were at any given time, as well as if there were temperature fluctuations. Track-and-trace technology combined with intelligent automation automatically triggered alerts if, for example, a plane left without an important package on board.
3. Enhance transparency from source to sustainability
Consumers and future talent alike are turning to purpose-driven brands that not only produce high-quality products, but also make a lasting impact on world communities. For companies that want to lead in their industry, it’s time for a deepened commitment to transparency and minimizing environmental impact.
Consumers expect companies to provide full transparency on the ingredients used in their products so they can make the most informed choices. Companies have a responsibility to improve sustainability of product and packaging materials, as well as provide transparency into key data points, including carbon emissions, packaging sustainability and supplier diversity. This elevated level of transparency is a key component in reaching climate goals.
Of course, transparency brings benefits beyond sustainability; it’s also profoundly impacting the customer experience. Customers expect to receive an order on-time, exactly as promised. For many companies, the COVID-19 pandemic prompted wild fluctuations in demand, complicated by simultaneous supply chain constraints, providing little room for error in addressing pressing needs. When stockpiling became prevalent during the pandemic, data science helped companies monitor typical order patterns and flag major deviations. When an algorithm detected an unusual pattern, it alerted supply chain professionals to investigate. Having a centralized source of all supply information can help identify where resources need to be applied to match demand.
Looking to the future
Supply chain organizations are poised to drive meaningful growth for their companies as they improve digital capabilities across operations, enhance resilience to respond nimbly to inevitable challenges and build full transparency into all aspects of the supply chain.
Supply chain leaders are in a crucial role as they usher in this drastic transformation. Results are already being felt by stakeholders ranging from suppliers and customers to policymakers and regulators. In fact, there is not a single person on this planet who is not affected in some way, as the changes we’re making today will lead to a healthier environment that benefits us all.
However, even with expanded digital capabilities and greater transparency, culture is ultimately a foundational factor for any supply chain’s success. People are at the core of everything, which is why companies must prioritize programs that nurture talent, while encouraging new points of view. It’s essential that leaders set the tone for the inclusion of all people and their innovative ideas, and actively explore opportunities to foster diversity not only on internal teams, but through suppliers and partners.
Even the largest, most high-tech and diverse supply chains can’t do it all on their own. The pandemic has been yet another reminder of the critical role that supply chains play in global public health. That is why organizations must collaborate closely with government organizations and policymakers around the world to drive a greater understanding of regional supply chain nuances and help address challenges before they arise. COVID-19 won’t be the last pandemic we’ll have to surmount as supply chain leaders. Let’s make sure the insights gained over the past 18 months make us stronger, smarter and more resilient than ever.