The Critical Importance of Supply Chain Connectivity in a Post-COVID World
Responses, both necessary and unnecessary, to the COVID-19 pandemic have threatened the strength of the supply chain model. The future of the supply chain will demand a higher level of connectivity and transparency in order to function, let alone thrive. The future of “connectivity” will be twofold: the inter-connection and transparency between supply chain partners as well as a connection through the Internet of Things.
In this blog post, we will take a look at the most important steps you can take to create a highly connected post-COVID supply chain.
However, to really amplify your efforts during and after this pandemic, we recommend implementing a well-rounded TMS platform. In fact, if you contact our Innovate team, we can schedule a free consultation to show you how our RedwoodConnect 2.0 platform is already helping our clients during this pandemic and how it can do the same for you.
Supply Chain Connectivity Starts at Home
Connectivity has to start at home. Connecting with local partners is going to be one of the most vital aspects of moving the supply chain forward. COVID-19 is demonstrating the fragility of globalization and international relationships, proving this kind of connection is almost entirely out of the hands of logistics partners.
For the past several years, it was common to see “made in China” or other made overseas labels. When the pandemic hit and trade borders halted, the transport of international goods stopped in its tracks as well. This not only meant that people couldn’t get their favorite products, but in some cases, it was even direr. For example, Europe imports nearly 80% of its pharmaceutical active components from China and India. When borders shut down, healthcare workers were scrambling to ensure they had medicine to offer patients. There’s no doubt European pharmaceutical companies are considering more local and regional productions for the most necessary medicines and products moving forward.
A lot of businesses are realizing that globalization isn’t as durable as we thought and that local connections might be a heartier solution. More logistics hubs are emerging at a regional level, and sourcing is moving more towards North American manufacturing, specifically “USA-made.”
“Connectivity” doesn’t always mean the broadest range of connection. In this case, we’re seeing that connectivity should first and foremost relate to the relationship of local manufacturers, transporters, and logistics partners.
Avoid Single-Source Dependency
Similarly, a lot of logistics companies have run into serious issues if one of their single-source partners was forced to shut down during the pandemic. Whether it’s because they sourced all their goods from overseas or their partner company couldn’t last during the economic shutdown, a lot of businesses suddenly found themselves without their materials or products.
This has spawned an even more network-based logistics model. Companies will outsource procurement, manufacturing, and even transport services from multiple partners to avoid the sort of dependency failures seen during COVID-19. Creating wider and broader connectivity of logistics partners will help enable a more flexible and adaptable supply chain. Managing the potential for upstream failures by broadening the supply chain network will be one of the most critical risk management strategies moving forward into this post-coronavirus world.
Implement Blockchain Technology
With more partners joining the supply chain, enabling transparency and communication is going to be the next important step. Blockchain technology is the most effective tool to opening up the visibility between partners. With real-time updates and continuously-saved versions of data sets, everyone along the supply chain can see exactly what is going on with a product down to the minute.
This also creates a heightened inventory count, which ensures consumers know the availability and delivery date of a product. This enables a heightened level of customer service that addresses consumer’s previous concerns of not knowing where their goods are if they can even purchase those goods, or when their order going to be delivered.
Blockchain is arguably the most important tech to connect logistics partners with one another and with consumers to create the most transparent and interconnected supply chain we’ve ever seen.
Connect AI With Humans
Artificial intelligence is the next wave of logistics technology. Machine learning is able to predict demand, risks, and supplies, while robots are helping to make a safer working environment for employees.
That doesn’t mean humans are obsolete, though. In fact, as unemployment skyrocketed during the pandemic, operations companies found that they needed more humans to fill up jobs and meet increasing demand. For example, the shortage of N95 masks required new manufacturing plants to open up, which meant a lot more logistics workers and managers needed to be brought in too.
There needs to be a connection and union between the implementation of artificial intelligence and human capital. Companies that try to pick one or the other are likely going to fail in the long run. To thrive with a changing logistics network, there must be a perfect marriage between humans and technology.
Read our resources about artificial intelligence, especially with regards to human employment and robotic implementation, below:
- How AI and IoT Can Change Transportation Management
- AI Is Really Driving Supply Chain Management
- Supply Chain AI—Is Your Company Ready?
- The Top Challenges that Occur with AI in Logistics
Get a Security System
An increasingly connected world also heightens the risk of security threats. Small and large businesses alike are facing cyber breaches that are damaging data, leaking private information, and halting systems altogether. Trust us when we say that the threat is real.
Data integrity is at the heart of a strong supply chain by enabling connectivity through the secure transfer of information, reduction of freight delays, better inventory management, and heighted data analysis.
We’ve seen some companies push back on this or push it to the side for the time being. But security needs to be a top priority. Imagine if you had a band of thieves stealing packages from your trucks and from consumer’s doorsteps. Would you just let them steal as many packages as they like and take the hit on your business? We hope not! Why would you let cyber thieves do that—and worse?
Security is critical to ensuring that the connection between partners and consumers stays strong and healthy. If your IoT devices, data, or processes prove insecure, you’ll start to see your customers and partners will stop working with you almost overnight. During COVID-19, we’ve especially seen a lot of businesses emphasize the importance of protection systems to protect private information. Learn more about how to protect your supply chain with security and risk management.
Supply Chain Connectivity in a COVID-19 World
The global pandemic is altering the way supply chains and logistics partners need to connect, communicate, and interact in order to move the business forward. Connectivity, transparency, and risk management are going to be the top drivers of success for operations teams.
Are you connected? Is your network prepared for the logistics rush post (and during) COVID-19?
The team at Redwood Logistics can help you create a custom plan to ensure you have the technologies, network, and tools to enhance connectivity. Check out our insights here to get started or reach out directly to a team member for a free consultation to start creating your customized solutions.