How The Current Pandemic Is Accelerating Supply Chain Digitalization

Article written by Biju Kewalram
Chief Digital Officer at one of the world’s leading logistics companies, Agility.

As the COVID-19 pandemic puts immense pressure on global supply chains, the value of big data and logistics technology has never been clearer. Supply chain technology is enabling companies to pivot rapidly in response to a swiftly-changing situation in a way that would have been impossible just a few years ago. As businesses deal with constraints on supply, demand and transportation, the value of rich data, real-time updates and paperless processes is becoming ever-more apparent.
Predicting The Unpredictable 
In an unpredictable and fast-changing environment, collecting accurate, real-time data is the key to adaptation.
Digital track-and-trace systems identify what goods you have, where they are and how they’re selling. RFID tagging is steadily replacing barcoding as a way of managing this. Why? Instead of manual scanning, RFID tags only need to be in the proximity of a sensor to relay data. They feed seamlessly into the IoT and enable you to locate your goods, monitor transit conditions and connect your inventory to an automated database for routine replenishment, reporting and invoicing — all without human input.
In a recent survey of 950 IT decision-makers at organizations across nine countries, Zebra Technologies reported that 52% of firms are already using active RFID technology and a further 34% have plans to implement active RFID in the next few years.
Once the data is captured, business intelligence becomes much easier. Dashboarding — focused visualizations of key metrics — can be done with a level of speed and accuracy that wasn’t possible until recently. Whether you’re tracking staff levels, operational compliance or year-on-year freight volumes, new technology makes retrieving and organizing the data instant and painless.
With COVID-19 highlighting market unpredictability and the limitations of a human workforce, organizations are already fast-tracking the implementation of this technology, and it’s reasonable to expect a sharp uptick in adoption. Even once the economy begins to recover, organizations with this amount of data will be able to make more informed strategy decisions, and the reduction in the physical handling of goods can also improve workplace hygiene.
Managing Supplier Strain
Coping with unpredictable demand usually means negotiating with suppliers, utilizing backup sources and ordering with a degree of elasticity. In a global pandemic, these measures simply aren’t enough to protect the supply chain.
Again, information is power. How much product can you realistically purchase, store and sell? Are there other ways to support struggling suppliers, like placing large advance orders or negotiating an alternative product mix? Without accurate data about your current shipments, you just won’t know.
Long-term, we can expect to see businesses diversifying their supplier base as a result of COVID-19 and changing consumer behavior as we’ve already seen in response to Brexit and the U.S.-China tariff war. Instead of relying heavily on a single country of manufacture, businesses are diversifying operations by spreading production among neighboring countries or moving them closer to the consumer markets, creating flexibility to pivot should any single location have reduced capacity.
Navigating Transportation Difficulties
Businesses are also contending with unprecedented levels of international transport restrictions and closed borders.
More than ever, competitive advantages are gained by having a strong handle on where goods are at any given time. If a business can identify exactly how far away a shipment is and how much time there is before it arrives, they’re afforded the maximum flexibility should it need to be-routed or delayed.
For example, the industry is witnessing a rise in slow steaming — the deliberate choice of slower transportation methods to delay the arrival of non-perishables. This “floating storage” buys time to create space in destination warehouses or find alternative routes to market if primary outlets are closed. Only accurate tracking processes can take the guesswork out of this kind of tactic and can provide an unparalleled opportunity for responsiveness.
A reliable logistics partner will help you navigate disruption. Look for a partner that can provide real-time updates on supply chains and transit options. Previously, it would have taken weeks to build this kind of sophisticated view, but technology developments over the last couple of years have reduced that to minutes.
Shifting Stagnant Stock
In 2020, businesses are still investing huge sums into owned or leased physical spaces, sometimes without developing their online presence and channels in parallel. COVID-19 is exposing the flaw in failing to operate an omnichannel offering, with even high-street behemoths struggling to shift stock.
As they say, the best time to build your website was 10 years ago. The second best time is now. Retailers should have e-commerce as a core part of their growth strategy. Service providers need a lead-generation website for client inquiries. Sometimes business has to be done face to face, but every brand now needs a credible digital home. Investing in online capabilities opens up global business opportunities to connect with customers and boost sales.
What if your stock is piling up? Your digital tracking systems should give you plenty of warning, buying you time to pivot. Move non-perishables to an alternative facility in your network. Redeploy unused equipment to diversify your offering. Or, as a goodwill gesture, consider donating excess perishables to local shelters and charities.
Supply chain technology is more powerful and accessible than ever before, and it will be the businesses that utilize it that survive this global disruption. As we navigate beyond the effects of this pandemic, both logistics companies and shippers will find that investing in data and automation provides the critical capability to make smart, agile decisions.
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