In addition to its humanitarian impact, COVID-19 has affected businesses worldwide, including those throughout the supply chain.
With an increased need for essential goods, changes in consumer purchasing and habits resulting from isolation requirements, and full lockdowns in some regions, it’s been a turbulent few months for businesses in the supply chain field.
An open survey by Supply Chain Canada reported 70% of respondents experienced disruptions to their supply chains due to COVID-19.
5 ways businesses are adapting to the pandemic include:
Despite many closures due to COVID-19, supply chains are still operating and are perhaps more critical than ever when it comes to necessities like food and medicine. For example, here in Canada, the government has outlined that in many cases supply chain operations are essential to Canada’s critical infrastructure throughout the pandemic.
It is vital that warehouse workers, delivery drivers, and all other employees are well well-protected as they continue to go to work.
Companies have been implementing new warehouse safety standards which include the use of gloves and masks, physical distancing, and disinfecting procedures.
Manufacturers, distributors, and retailers have all adapted to fight against and prevent the spread of COVID-19.
As early as March, observers said that "not since World War II have so many companies in the business of making cars, clothes, or other items been asked to switch up their production lines for the common good."
Since then, even more manufacturers have altered their operations and facilities to create essential protective equipment supplies for medical facilities.
A recent Business Insider article outlines some well-known companies who are switching up their operations to help the common good.
Examples include:
Experts suggest these changes occur most quickly and effectively when a manufacturer pivots within its core capabilities.
Distributors are seeing increased demand in certain areas of their centers, and retraining and redeploying staff to meet these needs.
Additionally, many distributors who typically supply businesses which are now closed have started redirecting products to consumers through online ordering or opening up their doors for curbside pickup.
This has been especially apparent in the foodservice space where the closure of restaurants coincided with an increased need for home delivery. Across North America, distributors from Sysco and US Foods and FoodMaven, to smaller niche food distributors have started selling directly to consumers who are self-isolating. Here at Routeique, we teamed up with a group of B2B distributors to create CalgaryGrocery.ca, an initiative enabling them to pivot to B2C and deliver staple foods to Calgarians at home.
Retailers in the B2B space have been making changes to their operations in light of social distancing requirements. Like distributors, retailers have adopted no-contact processes, such as online ordering, curbside pickup, and home delivery.
Management consulting firm McKinsey & Company has stated that a leading retailer they surveyed is taking measures including:
Private companies typically have playbooks for supply chain disruptions in their network, which they can follow when upheavals occur. According to large manufacturers like Johnson and Johnson, it's critical to have these robust business continuity plans to prepare for unforeseen events, and to meet the needs of those who depend on their products.
"These steps include maintaining key inventory at major distribution centers away from high-risk areas and working with external suppliers to support our preparedness plans," says Kathy Wengel, executive vice president & chief global supply chain officer at Johnson & Johnson.
Those in the industry aren't just implementing existing preparedness plans, but are looking at ways to maintain strong supply chains both now and in the future.
In recent weeks, supply chain resilience has become a hot topic, with everyone from the World Economic Forum to Supply Chain Digital covering the topic over the past few days.
Similarly, Tim Kraft of North Carolina State University notes that the "Triple-A" approach (agility, adaptability, and alignment, rather than a pure focus on speed or cost) to supply chains has "never felt more relevant".
In the coming weeks, businesses without a plan in place to deal with the current disruptions (in a survey by the Institute for Supply Management, this number was 44% of respondents) will likely spend time developing and deploying contingency plans, as well as putting new processes and approaches in place for the future.
For example:
These tactics, among others, can help businesses and supply chains remain robust as time goes on.
Most businesses immediately turned to technology as they began adapting their operations, enabling remote workforces, and setting up online stores.
Additionally, companies and experts alike are beginning to look at how technology can be used long-term to mitigate the effects of COVID-19, as well as any future disruptions of the supply of essential goods.
For example:
At Routeique, we’re helping businesses build a virtualized network of their partners, track their inventory, gain supply chain visibility, and optimize deliveries as they cope with changes in customer demand and disruptions in their usual operations.
In these complicated times, we're here to provide you with updates and info you need to adapt to the current supply chain landscape.
Stay tuned for future blog posts, or follow us on Facebook, LinkedIn, or Instagram for supply chain news and weekly roundups. In the meantime, we hope everyone stays safe and healthy.