1. Distributed network.
Most companies are trying to maximize efficiency by minimizing assortments, making small batch replenishments and embracing supplier rationalization. However, this can compromise resilience. A distributed and trusted network allows businesses to react to uncertain fulfillment of demand.
Digital provides an opportunity to automate key elements of the supply chain (e.g., warehouse and yard management). This can reduce the dependency on human labor and help sustain fulfillment in a time of crisis (i.e., when workers are not available, or processes change due to quarantines or social-distancing requirements). A robust distribution network (warehouses and logistics) with high-quality standards can help a brand to safeguard its supply chain. Does your business have the tools to manage the complex and distributed network? If not, it needs to find and implement them, quickly.
2. Centralized procurement.
Many organizations are applying technology to integrate data streams to minimize inventory holding at every node. However, having excess inventory may provide flexibility in a disruptive scenario such as the COVID-19 crisis, helping them to more effectively manage through prolonged uncertainty. At this moment, consumer stockpiling is resulting in empty shelves, which in turn is fueling panic buying and is adding to a demand spike. Centralizing procurement strategy rather than individual buying decisions provides better control and visibility of inventory for retailers to react faster and address the demand spike.
Organizations are typically highly protective about supply chain data, believing it to be a competitive advantage. However, collaborative planning, forecasting and replenishment (CPFR) will help organizations to enhance supply chain resiliency in times of crisis. Blockchain technologies allows trust-based information sharing (e.g., excess capacity in the logistics network) to optimize resources and reduce waste in the supply chain. (See our white paper on how this works in the apparel and footwear business.)
Sharing of non-sensitive information within the supply chain through trusted means will benefit all organizations linked through the chain including manufacturers, distributers and retailers.
Each experience should enrich future learning. Ongoing supply chain disruptions and the decisions taken to overcome the challenges of fear, uncertainty and doubt that define the COVID-19 pandemic should be recorded and applied if and when another crisis emerges.