Key Trends Transforming Supply Chain Post-Pandemic

Updated on :September 29, 2023
By :Victoria Puzhevich

The Coronavirus outbreak has hit most global industries leading to a drastic change in the B2B and B2C marketing strategies. Global economies experienced a pervasive production halting due to a disruption in supply chain management.  Countries had to adapt to unprecedented restrictions on travel and had to buy goods for several weeks ahead to survive during the lockdown. All these issues have revealed vulnerabilities in production strategies and supply chain networks around the globe. 

The Covid-19 crisis isn’t over yet. Many businesses worldwide are experiencing much pressure due to supply shortages and trade restrictions. To adapt to the new conditions and stay competitive in the market, businesses need to review their supply chain strategies and seek ways to make them more resilient and flexible.

The various supply chain trends such as artificial intelligence, machine learning, blockchain technology, etc., are driving the multiple industries ahead to digitize their operations.  In addition to these, the advanced supply chain management software tools contribute significantly to fortifying the pandemic supply chain network and improving the future of supply chain management.

How the COVID-19 Pandemic Disrupted Global Value Chains

Nowadays, manufacturers rarely use locally produced raw materials to manufacture products. In most cases, businesses import them from other countries and locations. The level of interdependency has increased, which has paved the way for established global value chains (GVCs). Global value chains provide businesses with high-quality products, and at the same time, it has also gained significance in the consumer marketplaces. 

The Covid 19 outbreak and the continuous lockdowns in most parts of the world led to a massive slump in production and decreased consumer demand. The reduction in foreign direct investment, an enormous decline in capital outflows, and the financial emergency crisis has resulted in supply chain management syndrome. 

In these pandemic conditions, businesses must align on a  coordinated response to the emerging heavy global economic crisis. For this, they have to rethink their financial models and supply chain strategies. 

For example, in pre-pandemic times, the main outsourcing aims were operations optimization and cost minimization. However, in Covid-19 and post-recovery times, businesses have to focus more on possible risk assessments, suppliers’ diversification, supply chain digitization, and other tactical moves. 

Looking Beyond Recovery

The Covid 19 crisis has brought significant changes in consumer behavior and disrupted production, bringing a disbalance in the supply chains. Hence business organizations need to opt for agile working strategies and transform their supply networks. They also need to analyze profoundly and develop strategies on how they should behave to overcome the crisis, including occurred supply chain issues. 

A recent study on supply chain management indicated how businesses can review their supply chain strategies and get back to the norm. It defined the following supply chain development trends:-

  • ability to recognize timely shifts in customer demands, business operations and tech, inner processes, and workforce;
  • making your business thrive while performing these shifts;
  • positioning your business to succeed by taking the tactical steps and preparing your organization to prosper. 

While all the consequences of the Covid-19 pandemic are still uncertain, the shifts in customers’ values, buying behavior, and how businesses should operate to meet their requirements have become more defined.

A Shift Of Customer Behavior And Values

Businesses need to create a more robust collaboration network to provide seamless and on-demand services. This involves extensive customer data exchange and creating a seamless data exchange channel. They should eventually substitute isolated channel strategies. 

This business strategy works well with B2B clients to improve their client solutions and provide seamless order processing, billing, shipment tracking, etc.

Businesses should also focus on improving their collaboration with customers. One has already witnessed a boom in the e-commerce industry, which is expected to continue in the post-pandemic period. For this, companies will have to build a robust IT infrastructure to stay competitive and enable self-service, order placement, and goods tracking. 

Establishing Trustworthy And Coherent Supply Networks

It’s been for some time that supply chains are slowly embedding digital technologies in their structure. Now, to establish a highly connected and trusted supply chain, businesses need something more than just random digital transformations of parts in their value chains.

With the Digital Supply Network (DSN) model, supply chain processes have evolved as entirely digitalized structures. DSN helps to mitigate possible negative impacts on the supply chain ecosystems, making these connections more resilient in the future. It ensures end-to-end supply visibility, agility, responsiveness, collaboration, and optimization.

To build DSN supply chains, companies will have to interconnect the existing digital tools and their infrastructures with data streams. It’s possible to do this by combining the most advanced digital supply chain software technologies, including the Internet of Things (IoT), cloud computing, 5G, Artificial Intelligence (AI), Machine Learning (ML), and robotics. 

IoT, cloud computing, and 5G connection will form the base for data storing and exchange, whereas AI and ML will accurately process, visualize and control data streams. These transforming technologies will provide improved logistics, accurate goods tracking, and higher efficiency safety at all the supply chain nodes to minimize cost expenditures. 

Building Resilient, Cost-efficient Supply Chains

While businesses and e-commerce are striving to expand globally, supply chains have always tended to get more regional to satisfy the local demand. The trend has become even more customer-oriented and near-shoring during the pandemic. In such challenging conditions, businesses are still trying to expand their supply sources globally or in a region where they can unleash their ecosystems. 

The strategy here is to implement the latest technologies to analyze better and optimize their supply chains. Although this analysis may seem overwhelming, it can help businesses strengthen their supply chains. They also focus on getting closer to remote customers, building a robust infrastructure, and deriving a more accurate estimation of disruption risks. They are adopting new policies, abiding by the local laws and regulations. As a result, they will depend less on the weather conditions and suffer less from poor services or high costs.

Adapting Supply Chains To New Working Conditions

The Covid-19 pandemic has proved that many employees can do their work remotely in various spheres. The experts forecast that workforce and workplaces will continue to shift to a remote working style. It will result in faster adoption of digital tools. 

This trend spreads beyond the traditional office work borders. Even manufacturers involved in heavy industries can remotely perform their data management to increase their operational efficiency. By adopting remote work practices, enterprises can leverage customized business applications that include artificial intelligence, machine learning, robotics, autonomous driving, computer vision, natural language processing, and other solutions. According to Statista, the global IT industry is estimated to spend  $95.4 billion in 2021 on enterprise software. 

How Should Companies Address The Challenge?

The pandemic has brought plenty of challenges and increased competition. Now, it’s clear that those companies that want to thrive from now on need to reconsider their supply network chains and strategies that empower them with digital solutions. 

Before taking any action, managers need to realize the vulnerabilities of their businesses and then formulate a clear plan on how to tackle each problem. Here are some practical steps they could take. 

Identify vulnerabilities

Businesses need to track their supply chains, including distribution facilities and transportation nodes, to identify the possible risks. It may be a lengthy and time-consuming process, but this can help to avoid sudden chain disruptions.

During the tracking process and mapping all the suppliers, businesses can divide them into various risk categories, from low to high. It should also involve other metrics. For example, the impact on production and revenues if a particular source is lost, the time needed to recover the supply chain disruption, and the availability of alternatives. 

The answers to these questions are defined by businesses’ manufacturing capacity, flexibility, the difficulty of the performed operations, and others.

Expand the Supply Base

Once a business knows its sources, it has to identify the level of dependency on them. They can be divided into categories from high-risk sources to low-risk. For example, in cutthroat competition or a trade war, businesses can search for alternative suppliers.

Besides that, companies should also consider the region and proportion of the goods they consume. For instance, instead of solely relying on one particular distribution channel or supplier, businesses should consider other alternatives to protect their shares in global markets. 

Also, if companies plan to shift their production base to any other region, they may tackle a few challenges. For example, the new manufacturing locations can have hard-to-reach areas or insufficiently developed transport infrastructure, like transport lacks or lacks high-capacity ports that can handle large containers. For this, they need to expand their supply chain and distribution base. 

Establish Safety Stocks

Businesses should practice efficiently analyze and manage their stocks. It may happen that alternative suppliers won’t be able to make timely delivery of goods. Therefore, companies should calculate if they can hold any extra stocks – how long they can have these stocks and in what form. Besides that, they need to consider the risk of their obsolescence. 

The immediate unavailability of goods supplies resulted in an alternative to just-in-time shipment practice. The advantages of implementing this alternative practice should be weighed against the sudden spendings caused by supply chain disruptions and revenue loss.

Empower Supply Chains With Digital Tools

The Covid-19 crisis has revealed that supply chain digitization is no longer optional. Those companies that use digital solutions in their business strategies are more prepared for it. They manage to contact their clients and quickly reorganize their selling strategies by switching to goods delivery to customers’ doors. Moreover, those companies can easily estimate their stocks and better prepare for possible commodity shortages.

The entire digital transformation of supply chains is progressing well these days with the right tools. . Businesses keen on this can implement supply chain management tools and other apps to streamline and optimize their supply chains. Total digitization of supply chains includes deep interconnection between various fragmented systems such as Application programming interfaces (APIs), Electronic data interchange (EDI),  improved logistics, order management, better inventory management, supplier management, and other innovative practices. 

Fortunately, IT companies are also ready to respond to the challenges brought by the pandemic. They help businesses empower their supply chains with the most effective tools involving AI, automation, blockchain protection, and data analysis. The IT supply management services allow companies to:

  1. Use Predictive Analytics for forecasting and planning their demand/ supply volume and distribution probability by analyzing the variabilities that influence the demand, e.g., social network trends, the workload of delivery routes, and others. 
  2. Implement Procurement Management Systems for logistics and sales management, suppliers and customers tracking, advanced data analytics, and others. 
  3. Use Supply Chain Enterprise Applications for greater visibility into operations and tracking their performance. These apps can monitor and identify the deep-rooted causes of downtimes and low-performance and automatically fix them, e.g., activate an order reshipment or change settings to improve the delivery speed. 
  4. Manage Orders with apps that can replan orders in real-time, automate order placement, provide improved feedback on the state of the order, reduce supply costs by providing no-touch order processing. 
  5. Track And Manage Inventory with inventory management systems, e.g., using RFID or barcodes allows keeping all the inventory in one place, timely restock, track product expiration dates, and much more. 

Positioning the Organization to Thrive

Significant breakthroughs in vaccine developments have brought some optimistic views on the recovery of the global economy and supply chains. However, it’s hard to predict how long the pandemic will last and if it’ll bring more economic disruption. One way or another, businesses will still have to strengthen supply chains, ensuring their resilience against any future global crisis. 

Manufacturers and retailers have to realize that re-establishment of disrupted supply chains isn’t a one-time action. From now on, traditional business approaches don’t work anymore. Companies have to carefully develop their new strategies, aim at long-term investments into reforms of their supply chains, and adapt their businesses to the post-pandemic world. 

Businesses can implement a three-step strategy that will help them to prosper in after-Covid times. These steps involve-

  • making the supply chain an integral part of the corporate strategy;
  • implementing digital solutions to empower the corporate strategy;
  • identifying the means a business needs to translate chain transition into action.

Making the Supply Chain an Integral Part of the Corporate Strategy

Companies that have access to global markets have to predict and adapt to the emerging changes quickly. These changes are not restricted to only possible pandemic crises but also involve unexpected market changes and emerging disruptive supply chain technologies.

In the context of increasing complexity and rapidly growing customer expectations, companies have to respond swiftly to these challenges. For this, they need to unite their business and chain supply management strategies, develop and sync them closely to meet their business’s commercial needs. This way, they will improve their customer services, reduce delivery expenses, and build stable and flexible supply chains.

Implementation of Digital Solutions To Empower Corporate Strategies

In the past, businesses adopted standard planning,  transportation, resource, and inventory tools to satisfy the market’s needs. However, fast-emerging technologies have significantly changed supply management approaches. 

Now, technologies are used to automate delivery stages, analyze business data, and provide business owners with new insights. For example, implementing AI and Big Data could indicate how to upgrade and improve business and supply chain strategies, while cloud-based solutions can help store the accumulated data and quickly share it among stakeholders. 

Identifying the Means, a Business Needs to Translate Chain Transition Into Action

When introducing reforms to their businesses, companies won’t switch to new strategies at once. They will still have to roll back to the pre-pandemic working style. While implementing digital solutions, business owners will still have to rely on their employees strongly. Therefore, they must carefully consider which skills their workers should possess to perform current operations and which skills they will need to transit to a new system. 

Predictions for Supply Chain Technology

While some companies are only beginning to pay attention to their supply chains, others are already actively taking steps in supply chain renovations, including digitization. Statistics on implementation of digital solutions to supply chain upgrading backs up the necessity for reforms.

It is predicted that demand for robotic goods-to-person systems will increase four times to maintain social distancing in warehouses. And in the upcoming years,  more work in factories will be performed remotely with the help of Virtual reality (VR) and robotics. Besides that, more and more supply chain organizations are expected to invest in AI and advanced analytics to produce extensive data.

Today companies have been investing in the development of customized apps. They provide business owners with advanced analytics and automation, improving their supply chains and businesses’ visibility, flexibility, and sustainability.  Companies are also keen to invest in the best free and open source supply chain management software such as Openboxes, Odoo Inventory, O2b Technologies, OpenPro ERP, etc., to gain the mentioned benefits. 

Conclusion

The global economies have faced an unprecedented crisis caused by Coronavirus disease. After its outbreak, it has created havoc, causing global market declines and disruption of supply chains. In 2021, businesses continue to suffer from the pandemic consequences. However, it is time that companies find ways to overcome the crisis. 

To foster the supply chain management, businesses need to perform a deep step-by-step analysis of their supply chain technologies and systems, diversify their product suppliers, and implement digital solutions to all the functions of their supply chains. To know more about the supply chain tools, their core features, benefits, purpose, go through the GoodFirms’ supply chain management software buyer’s guide providing comprehensive information on the software.

Victoria Puzhevich
Victoria Puzhevich

Victoria Puzhevich is a Lead Specialist at SCAND, a software development company. With more than 15 years of experience in the IT industry, Victoria is obsessed with all tech-related things. Her passion is to provide insights on the latest IT industry trends and help companies grow their business through technology.

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