7 Common Changes to Supply Chains Amid COVID-19
As the coronavirus pandemic continues to wreak havoc on businesses worldwide, supply chains are struggling to figure out their new normal. With the closure of many plants and factories, the inability to come near one another, and the major transition to online retail sales, supply chains for industries of all kinds are scrambling to adapt. Though this is a stressful time for everyone, it can also serve as an opportunity to embrace what’s working right now, and look to the future.
Here are seven common changes to supply chains amid COVID-19.
1. Touchless signatures
Since face-to-face interactions are no longer allowed, methods for everything from shipping to carrying to receiving orders must now be rethought. As a result of the inability to interact with drivers, customers are now starting to see touchless proof of delivery (POD). Since customers can no longer sign or exchange documents, this has become somewhat of a new standard.
With a shift towards touchless PODs, curbside pickup, and threshold delivery, it remains to be seen how this will impact freight claims since no one will be watching freight or residential deliveries when they are signed for.
But the good news is that although many industry standards will become passé, there is a deep opportunity to create a system even better than before. As Romil Bahl, president and CEO of KORE said, “We see manufacturing among many industries emerging from this pandemic more resilient and more innovative. This is the time where creativity embracing technology and outside-the-box thinking is called upon in ways that we couldn’t have imagined prior to this experience.”
One of the major issues that have come to be during the global pandemic is the disruption that outside manufacturing and production can have on the entire supply chain at large. Reducing dependence on a global supply of goods – particularly those that are thought to be essential to national security – will be the new goal in order to cut down on uncertainty.
From sourcing materials to storing inventory, strategies must be reconsidered. But with a history of dependence on other countries, it is unlikely that reshoring will happen too quickly.
This difficult time has served as a lesson for many companies who are using it to reassess issues that have arisen. For many companies, this will generate a stronger focus on diversifying manufacturing to places outside of China.
3. Adding AI robots to global supply chain models
While artificial intelligence (AI) and robots have been increasingly front-of-mind for a while, it seems as though COVID-19 has only highlighted the benefits of embracing it. Companies have discovered through this difficult period that with the help of AI they are able to respond much more rapidly and appropriately streamline their processes.
With flight cancellations and labor shortages due to illness occurring across the globe, this time has shown us the vulnerability of human capital. Companies are seeing a need for manufacturing now more than ever.
New AI technology and automation help to reduce the need for workers while improving the safety of those employees who are still needed. The decrease in the number of workers needed helps to reduce quality issues, which in turn helps to boost customer satisfaction. With the help of technology, workers won’t be as rushed to get things done, which will also increase safety and productivity.
4. Monitoring freight with RFID
Utilizing barcodes as a means to identify products has made it difficult to maintain real-time supply chain data. Without real-time data, visibility becomes extremely difficult and slows everything down. This is especially true for certain industries, such as the pharmaceutical industry, in which knowledge of the chain of custody is essential.
Luckily, radio frequency identification (RFID) technology has begun popping up. RFID helps with the issue of visibility by providing better granularity of data and more frequent updates (down to the mile). This creates automatic data population for the entirety of the supply chain. Additionally, this technology will help to improve not only efficiency but also transparency – a factor that has proven extremely important in customer expectation management and satisfaction.
5. Involving Blockchain
One of the biggest issues of supply chain management surrounds the idea of trust and data ownership. Blockchain technology can help with this problem by improving transparency.
Blockchain works by storing digital information in a public database. It is capable of storing up to 1 MB of data per each “block.” These digital pieces store information about transactions, dollar amounts, and dates and times, while still keeping that information separate from other blocks.
With processes that present the risk of infection from COVID-19, businesses and governments wish to improve the pharmaceutical and medical supplies, food, goods, and industrial and consumer products by keeping track of each shipment’s origins, also improving the integrity of not only each item, but also the whole process.
6. Implementing warehouse robotics
Utilizing robots and AI in warehouses will help to improve and speed up the fulfillment process by taking away the need for redundant and physical challenging labor. This will also eliminate the chance that factories will be shut down or slowed due to reduced workforces, as has been seen due to the coronavirus.
Prior to the pandemic, the use of AI, robotics, and automation was already on the rise within warehouses and distribution centers. As labor has become more expensive and digital commerce continues to become more relevant, this technology will continue to speed up operations.
7. Incorporating more digitized solutions
It’s easy to understand why digitized solutions have come to the forefront of the mind during the age of COVID-19. Human-to-human solutions have been slowed down or for some companies shut down all together. Leveraging digital solutions can be the difference between companies maintaining full velocity and those unable to do business whatsoever.
With the decline of brick-and-mortar stores occurring even before states shut down non-essential businesses, it’s not surprising that more and more people have moved to digital retail and orders upon the outbreak of the coronavirus. Now that consumers have become even more reliant upon digital for their needs, digital solutions are now considered to be an integral part of operations.
Victory Supply Chain Services is a non-asset based 3PL with both the experience and the network of alliances conducive to helping you to execute the smartest shipping for your needs. We take a holistic approach to logistics, providing unparalleled strategy, expertise, and customized solutions tailored to your business and your comprehensive supply chain management goals. Think of us as your personal trainer, nutritionist, therapist, yoga instructor, and that weird friend from your adult kickball league. We can help to improve each component of your supply chain so that you can focus on making your business the most successful.