Every year, MHI examines the supply chain through the lens of current affairs and advancements. 2020 was all about disruption. So, it’s only fitting that they emphasized adaptability and resilience in the 2021 Annual Industry Report. To that end, three key concepts stood out: respond, recover, and thrive.
As MHI puts it, digital technologies and innovations position organizations to (1) respond quickly and effectively to disruption, (2) recover faster than their peers, and (3) provide competitive advantages to thrive when the storm passes. No one could’ve predicted the pandemic and its lingering effects, but what has it taught us about how to respond, recover, and thrive in the face of a crisis?
Think back. It’s March, 2020, and the first confirmed coronavirus cases have reached the U.S. Shutdowns and panic buying are in full force, leaving the supply chain vulnerable. But the world has to keep moving forward, even if life looks different. So how do we respond to the situation?
Companies have leaned on a few core strategies to cope with the pandemic, like technology tools, new workforce models, fulfillment solutions, and enhanced service.
All Things Digital
Digital-forward companies were uniquely positioned to cope with pandemic challenges. Some used IoT platforms to remotely monitor operations and production, while others leaned on automation to cut labor. At the same time, cloud supply chain platforms adapted to both meet customer needs and scale up to accommodate e-commerce.
Work from Home
Logistics is compatible with a significant remote workforce. At the height of the pandemic, remote work climbed to 58%, and it’ll still hover around 32% afterward, because technology and automation have proven effective, and these systems leave organizations less vulnerable.
Technology has enabled remote automation in warehouse settings, but extends far beyond, to the most essential operations. Consider this: robots are actively working on the front lines, transporting medical supplies within hospitals so staff can focus on patients.
Of course, not everyone can work from home. Hands-on roles require an onsite presence, so employees who are critical to operations, manufacturing, and distribution/fulfillment inherently have less flexibility. Warehouse workers, maintenance personnel, and others keep things moving, while remote folks mitigate risk.
Because of the pandemic, retailers like grocery stores are adding micro-fulfillment centers to accommodate online orders. Stores also expanded programs to promote social distancing and ensure customers get what they need.
- Buy online, pickup in store
- Last-mile delivery
- Curbside pickup
The strategy helps both sides, too. Customers feel safer and enjoy the convenience, plus in-store pickup and contactless curbside delivery is up to 90% cheaper than shipping for retailers.
Companies knew they needed to maintain customer loyalty and engagement throughout the pandemic. But how can you do this when you can’t freely interact?
- Transparency (Example: Covid emails in early 2020)
- Virtual experiences (Example: webinars, virtual conferences, etc.)
- Contactless delivery (Example: grocery, meal delivery)
Customer satisfaction knows no bounds. Some organizations even provided extended repayment terms and deferments, given the prevalence of financial instability.
Recovery from a crisis like coronavirus means optimizing for efficiency during disruption and beyond, preparing your organization for future disruptions. Flexible digital supply chains were better positioned to weather the pandemic. Those that readily embraced technology fared better, too.
- Digital-savvy workers readily adapted to working from home
- Analytics assisted with adjusting to changing operational needs and crisis planning
For supply chain success in particular, organizations across the country—and the world—are adopting specific strategies to build their resilience now and into the future. MHI discovered a handful of go-to methods, like regionalizing supply chains and diversifying, building long-term supplier relationships, and building safety stocks of materials.
Regionalizing and Diversifying
One major hit from the pandemic was the strain on supplies, made even worse by slower delivery times. Both regionalizing supply chains and diversifying the supply base geographic footprint can protect businesses from falling behind.
- Two is better than one! Trusting two (or more) suppliers for materials provides a safety net, because you’re less likely to face supply shocks.
- Multiply those benefits even more by collaborating with suppliers in dispersed locations. If one supplier is suffering (shutdowns, shortages, diminished labor), another may be able to help.
Having strong relationships with key suppliers has its perks, like readily getting your hands on scarce supplies. Plus it’s easier to request last-minute order changes when your needs suddenly change if you have a strong rapport.
Building a Safety Stock
Did you stockpile toilet paper in 2020? It’s a comfort to have an excess supply of essential items to avoid running out. The same goes for companies, especially while grappling with uncertainties. As MHI points out, having a safety stock of supplies helps companies deal with disruptions, so business can go on.
- Entities that struggled with supply during the pandemic did less planning for disruptive events, facing shortages. Example: hospitals struggling with PPE.
- Well-prepared entities with crisis planning in place, as well as a safety stock of essentials, fared much better. Example: ventilator surplus.
Without question, more organizations were blindsided than not in 2020. As a result, they’re establishing tools and policies to prepare for future disruptions. Similar to the scouts, we’ve learned to “Always be prepared.”
When something disastrous like Covid hits, you adapt and slowly bounce back…then what? As part of the “Thrive” process, MHI highlights the importance of long-term planning. If your business can weather a pandemic and see the light on the other side, you want to propel future successes. Staying competitive in a post-disruption market means adopting strategies for protection against future challenges and finding an advantage. Technology keeps businesses on top.
Adopting Digital Technologies
After over a year of remote work and ecommerce, individuals and businesses alike know we can adapt to anything. Technology has the power to see supply chains through disruptions and thrive in the aftermath.
Example: e-commerce grocery shopping. Raise your hand if curbside has been your best friend. Grocery stores were notoriously shy of getting ahead of the technology curve before the pandemic, and it became the great motivator. To help with the process, grocers opened localized micro-fulfillment centers to turn orders around quickly. The automation technology behind the scenes does three things: serves a new customer base, saves money, and expedites order fulfillment. Now, e-commerce for grocery helps grocers to thrive financially and accommodate customers, and it’s likely to stick around in some capacity.
Companies need technology to improve their operational resiliency and thrive after disruption. What other ways has technology enabled companies to thrive during the pandemic?
Respond, Recover, and Thrive with Automation
Organizations all over the world tapped into new ways to operate throughout the pandemic—and chart new courses forward. MHI notes that 49% of supply chain leaders have accelerated digital technology spending since 2020, ranging from robotics to inventory/network optimization. Automation has helped so many respond to one of the biggest disruptions the supply chain has ever seen, and will continue as we recover—taking the tools and lessons we’ve learned with us to thrive in the face of future disruption. Visit us at iamrobotics.com to learn more about robotic automation.