I went down to Barry’s Bikes in my hometown to buy some inner tubes from the bike shop that had been a fixture in my town for decades. Sadly, my bicycle tires are still flat because Barry’s storefront was shuttered. To console myself over the loss of this beloved local landmark, I decided to bake a carrot cake, but I was out of baking powder. At the grocer, the entire shelf of baking ingredients was bare. We’re only beginning to understand the depth and breadth of the disruption COVID-19 is inflicting on supply chains. Will things ever return to normal and how can enterprises prepare to operate in an uncertain future?
Seeing me peering through the windows of Barry’s emptied storefront, a neighboring business owner came outside to explain. He shared that Barry had been having extreme difficulties sourcing and retaining inventory and had opted to hang it up. For his part, the grocer reported that baking powder (and other baking goods) has not been arriving on the delivery trucks despite having been ordered.
Modern supply chain management practices emphasize predictive analytics – analyzing prior operational data to intuit future resource planning. But the Coronavirus pandemic has so destabilized the economic rhythms of global commerce that it is difficult to use past performance to plan future results.
Some industries have been nearly ground to a standstill due to immediate and near complete cessation of demand for their products. Think beer (I always do!) With bars, restaurants, sports and concert stadiums all shuttered, beer producers have lost nearly all demand for draft beer in barrels; while at the same time, they’ve experienced overwhelming demand for packaged beverages (in bottles and cans) for the resulting migration to at-home consumption of beer. This sea change in the beer industry has also had outsized consequences for the supply of CPG packaging (huge increase in demand) as well as for the manufacture of draft barrels (demand ground to a halt).
Other industries have seen meteoric spikes in demand for their products, eclipsing the seasonal spikes they typically experience and prepare for with their supply chain management technologies. For instance, producers of disinfectant products, personal protective equipment (PPE) and household paper products are startling examples. While the hoarding of toilet paper phase of the pandemic may have subsided, the household cleaning aisle in groceries across the US are still often thin to empty and adorned with signage explaining limits of 1 or 2 items per customer.
Providers of enterprise technologies designed to improve supply chain logistics planning and execution are among those seeing increased demand. Large organizations – whether they’re experiencing the upside of the supply chain change wrought by the pandemic or the downside – have had their thinking about the imperative of supply chain management software crystalized by the Coronavirus. Whether they’re overrun with orders or scrambling to find ways to trim inefficiency during a belt tightening and restructuring of their supply chains, all businesses have awakened to the necessity of flexibility, visibility and process efficiency that TMS and other technology affords them.
Production of bicycle tires/tubes, baking powder and other products hit with unexpectedly high demand will resume. In the interim, more bike stores like Barry’s are likely to close. More supermarkets may have to find alternative sources of products to keep their shelves stocked. All of this requires systems that can handle the unexpected, provide visibility into distribution networks, find shipping capacity in atypical lanes, etc. Providers of TMS, YMS, freight audit, route optimization and other solutions are being overrun with new business. Act now to get your supply chain automation project under way.