It’s safe to assume that your company’s supply chain has survived the resiliency test if it survives 2020 and the interruptions in early 2021.
Why do we say that? Now let’s define supply chain resilience. Resiliency is referred to as the capacity to tolerate challenging circumstances, bounce back from stretching or bending, or recover from them.
–What about the last two years strikes a familiar note?
What is Supply Chain Resilience?
Tariffs and trade conflicts, natural catastrophes, epidemics, economic turmoil, and cybersecurity threats are all sources of supply chain disruption. Because each disturbance has its own subtleties, planning a precise reaction to each one is tricky. The goal is to create a supply chain that can withstand and recover from various threats.
Shipping companies must be capable of responding and adapting to known and unforeseen dangers as rapidly as feasible. Accepting technology is a component of that solution. It also necessitates adaptable and diverse suppliers, methods, and talent to build a company that flourishes while others suffer.
Several supply chain resiliency strategies, for example, may have anticipated a health emergency in which enterprises and critical partners confront lower-than-normal workforce levels. However, the rapid move from traditional to online purchases for staples, as well as an increase in protective equipment and unexpected products like bread machines and home-schooling items, caught many merchants off guard.
2020: A Year Of Supply Chain Disruption
COVID-19 caused supply chain disruptions in practically every business in 2020. Here are 4 of the major interruptions that tested supply chain resilience.
Challenged Retailers and Suppliers Due to Panic Buying
Unprecedented levels of panic in buying toilet paper, hand sanitizer, food, beverages, and other necessities were brought on by COVID-19. The demand caught off the just-in-time inventory techniques used by suppliers and merchants guard. Supply and manufacturing chains were unable to ramp up quickly enough. Sales of hand sanitizer, for instance, increased 313 % in a single week in Feb 2020, as per Nielsen data. Of course, there was a shortage of both toilet paper and paper towels.
It was no easy task to coordinate the operations of vendors, manufacturers, truckers, warehouse staff, store employees, and other crucial supply chain components.
In addition, supply chain managers are teaming with 3PLs, such as Tech360, that provide storage capabilities to modernize their warehouse infrastructure and bring their items closer to the consumer for faster fulfillment. Optimizing your supply chain for increased resilience necessitates a 3PL partner with tech, experience, exposure to multimodal capability, communication, collaborations, and more.
COVID-19 brought vulnerabilities into food supply chains
Plant shutdowns disrupted food supplies in order to ensure safety regulations before reopening on a restricted basis in some circumstances. School, university, entertainment, and other non-commercial dining location closures impacted demand and supply networks. Food wholesalers and producers must figure out ways to sell straight to the people. Retailers learned how to sell diner-quality meat in family-sized containers and schedule a curbside pickup.
As a result, food and beverage manufacturers sought third-party partners to use their experience, technology, and services. New technology is replacing paper monitoring for food traceability, particularly for refrigerated items like meat and processed agricultural goods. These systems can ensure quality and enable recalls or other actions when appropriate.
Social distancing norms affected manufacturing.
Throughout the epidemic, companies were closed due to COVID-19-infected employees, and truckers and warehouse staff were also laid off. Food processors, automotive manufacturers, and other large-scale industries faced closures and labor shortages.
According to a study, 59 % of decisions are concerned about not being able enough workers to meet customer expectations. Partnering with a 3PL to deliver services and implementing technology to eliminate manual procedures helps improve resiliency in the face of manpower shortages.
Changing consumer behavior
The fact that the pandemic changed what and how consumers purchased drove most of the upheaval. Ecommerce order volumes increased for domestic necessities and quarantine-related items. Overall, US customers will spend $861 billion online in 2020, a 44 percent increase over the previous year. More consumers purchased more important, bulkier things online – furniture, gym equipment, etc. – contributing to overburdened parcel shipping networks.
As a result, supply chain leaders started to turn to 3PLs like Tech360 for alternate delivery solutions. These alternatives, such as white-glove delivery networks, enabled shippers to circumvent major parcel networks in exchange for personalized services and guaranteed capacity.
Supply Chain Disruption Will Continue
It’s safe to predict that 2022 will be another turbulent year. Many industry leaders and CEOs predict that “unnatural” freight will continue in 2021-22. When corporations build just-in-case inventory to suit unanticipated consumer demand, freight does not follow previous patterns. There really is no such thing as the new normal.
Companies are utilizing ties with 3PLs for resources, experience, and technology to address these challenges.
Protect Your Organization from Supply Chain Disruption
Building supply chain resilience is crucial for this and future crises. “The COVID-19 situation highlights the need for resilience and accurate, real-time information in assisting businesses in making better-informed decisions and mitigating the costs of supply chain interruptions.”
You can’t plan for every possible situation. Regardless of the hurdles, a company’s supply chain can be able to adapt and change to satisfy customers. An expert partner, such as Tech360, will assist you in developing a supply chain that can stretch and flex but never break.
