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By Grant Howe Thursday, October 29, 2020
While the most-devastating ravages of COVID-19 have (hopefully) passed, the new and disruptive ways of conducting digital business spawned by the pandemic will be with us for a very long time.
Contactless payments, omnichannel everything, telemedicine, learning from home and working from anywhere, curbside pickup of just about anything you can imagine, and combatting “Zoom fatigue” have all become, remarkably, perfectly normal elements of our lives in just seven months.
Without question, those consumer-level disruptions have triggered similar or perhaps even more-intense upheavals behind the scenes in operations, logistics, and supply chains. With tighter regulatory and safety mandates likely to occur in the wake of COVID-19, many businesses are taking a hard and end-to-end look at the most essential function: the supply chain.
Here are 10 examples of new types of thinking and approaches companies are taking to reconfiguring supply chains to be ready to comply with new regulatory requirements and meet the relentlessly escalating demands of consumers and business customers.
1. Reshoring. The COVID crisis revealed significant risks of having huge percentages of the essential materials for the American medical and pharmaceutical industries sourced in China. Companies across many industries are looking to either replace those offshore suppliers with domestic suppliers or complement offshore partners closer to home.
2. Lean manufacturing. With the rapid and significant advances in manufacturing technology, some industrial companies deploy lean processes to reduce the number of steps and/or suppliers required to produce essential materials. Fewer links in the chain can mean less exposure in challenging times.
3. Digital integration. Regardless of how they’ve operated in the past and how resistant they might be to new technologies and approaches, suppliers in the post-COVID world have to be open to welcoming at least some digital technologies into their operations to enhance planning, accommodate changes, and accelerate all facets of their operations.
4. Supply chain applications. Going a step beyond digital integration, many companies on both the supplier and customer sides are installing supply chain software. These can come as standalone applications or, in many cases, as part of an integrated set of ERP applications that automate everything from sales to inventory to procurement to finance.
5. Additive manufacturing. As 3D printers and other advanced manufacturing technologies become more capable, less complex, and less expensive, they’re becoming viable and valuable options for businesses looking to optimize their supply chains. In some cases, businesses are taking on the production of some supplies themselves; in others, they are specifically looking for suppliers with aggressive deployments of additive-manufacturing capabilities to become strategic partners for the future.
6. Robotics and advanced automation. The severe challenges faced by meat-processing plants suffering COVID outbreaks among their workforces have inspired many types of suppliers to accelerate their evaluation and deployment of automation. This ranges from some basic steps within assembly lines to cutting-edge advances in robotics.
7. Reimagining business models. Many businesses were forced to dramatically alter the products or services they offer, and/or the way they took those products or services to market and how they engaged with customers. In doing so, smart companies are reducing their dependence on or even eliminating products and services that require far-flung or risky supply-chain configurations.
8. Reimagining processes. As in #7, some companies are overhauling their ongoing processes to reduce or eliminate some risks by dramatically altering their traditional ways of working. Look at what Microsoft, which has somewhere north of 150,000 employees, just announced: it has given many of its employees the option of permanently working from home. Consider the impact that has on its sprawling network of offices around the world, its need to buy office furniture and other essentials, stock cafeterias with fresh food, and so much more. Reimagined processes and workspaces can have massive impacts on supply-chain operations.
9. Putting suppliers on the clock. While responsiveness has always been essential in supply chain relationships, the sudden arrival of a largely digital world is accelerating the pace of change in our personal lives and, correspondingly, in the business world as well. Suppliers will be expected to accelerate everything they do, from shipments to creating new products and services to handling returns, and much more. Some suppliers will rise to the challenge, and others won’t be able to make it.
10. More focus on the end-customer. Smart leaders will respond to customers' ever-increasing demands and expectations by enlisting the full support and capabilities of their entire supply chains in meeting and exceeding those escalating demands and expectations. Increased visibility throughout a supply chain makes this new approach possible. It is often built around modern and highly capable ERP systems that offer end-to-end visibility so that all parties can collaborate on meeting and exceeding customer expectations.
Gone are the days when a review of the supply chain was confined to trying to squeeze slightly better terms out of suppliers. Today, it’s all about helping businesses meet and exceed customer expectations, which is the first step to creating great customer experiences.
This is a new reality for all of us. The sooner we begin figuring out how to leverage these 10 advances to build great customer experiences, the better.
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About the Author
Grant Howe joined ECI as Chief Technology Officer in April of 2015. Howe brings more than 21 years of product development and management experience to ECI.
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