Jan 22, 2021 / BY microlistics

How COVID-19 is changing supply chains for good

As we enter the new year with multiple vaccines being rolled out around the globe, there is a strong sense of hope emerging in that we may see the end of the crisis phase of the coronavirus pandemic in 2021.

COVID-19 caused massive disruptions to supply chains throughout 2020. In our May blog, supply chain workers – traditionally unsung heroes – rose to the challenge. Dock workers, truck-drivers and warehouse personnel stepped up to unload containers, deliver goods, and process orders in difficult conditions to ensure everyone has access to food and medical supplies needed to provide comfort in troubling times. In the thick of the first wave, Microlistics along with other companies around the world was forced to adapt as face-to-face contact was limited if not banned outright.

The pandemic also caused shifts in consumer behaviour, accelerating the decades long growth in eCommerce sales. As we wrote back in July, consumers are now buying products online like pharmaceuticals, perishables, and every day household items that they have traditionally preferred to purchase in person. Smaller order sizes and more single items, or ‘eaches’ with odd product mixes and multiple individual SKUs are the new normal – ordered at higher frequencies with a heightened demand for timeliness.

Like supply chain workers, 3PLs rose to the challenge to support their partners taking on more of their customers’ direct-to-consumer, omnichannel fulfillment. While manufacturer, distributor, and retail warehousing have adopted the same strategy to support their downstream and direct customers.

As we move past the pandemic and economies around the world begin to gather steam for what is shaping up to be a goods-led recovery, it is important to reflect on the positive learnings and changes to supply chains that will outlive the pandemic.


Remote WMS implementations can work

In response to government stay-at-home and physical distancing mandates, Microlistics moved many of our new system implementations to a remote model. We saw some unexpected benefits. While face-to-face will never be completely be eliminated, nor should it, our extended, less condensed online implementation, training and UAT schedule resulted in increased participation and allowed more time for participants to reflect and plan between sessions. In the best of cases, this delivered deeper insights and optimisations in the solution design phase and stronger fine-tuning and issue resolution.

Importantly, our remote implementation methodology increased the number of touchpoints with the customer – in terms of both frequency and the number of included resources. More interactions, with more stakeholders helped us to deliver better results.

However, we also learned that success – particularly in remote deployment – is very much tied to strong commitment from all parties to adhere to the agreed timelines, collaboration modalities and review mechanisms. A lack of discipline from either party puts project success at risk.


Investing in people pays off

With the unprecedented stress on resources caused by the virus, warehousing operations adapted their physical spaces, processes, and labour practices to physically distance their teams all while striving to maintain throughput, meet promised service levels and keep critical goods flowing.

Amongst hundreds of Microlistics customers, we observed those who adapted best often possessed experienced warehouse leaders with strong executive influencing skills, and a culture of investment in training and development of warehouse team members.

As we move past the pandemic and the supply chain sector faces a generational shift, with many experienced ‘baby boomers’ in leadership roles soon to retire, it will become increasingly important for organisations to capture that knowledge from the human ‘tribe’, with its inherent flexibility, into documented processes and system discipline.


Diversified supply chains with flexibility and visibility pay off

To reduce costs and required capital, traditional supply chains are built to be linear with minimal touches and load consolidation as goods move slowly from single sources to end destinations, gradually dispersing stock along the way.

Organisations operating on a just-in-time delivery model rely on lean inventory levels and purchase history to predict future demand.

Country shut-downs, panic buying, and consumer hoarding exposed some flaws in this supply chain paradigm that resulted in depleted and, in some cases empty, shelves.

Organisations with a lack of holistic visibility on inventories in transit or at rest, struggled to rapidly redirect goods to where they were needed most. This was compounded by the drastic reduction of international air freight capacity.

Those most successful adopted omnichannel fulfillment strategies with direct-to-consumer shipping, smaller more tactical orders, and endless aisle inventory sources with visibility along the entire journey.

Adaptable and flexible warehousing management systems are the key to manage this increasing complexity.


So where to next?

Warehousing and supply chains are in the thick of surviving the current situation and will be integral to the global economic recovery. However, there is light at the end of the tunnel.

Manufacturing, distribution, retail and 3PL companies need to invest in supply chain technology and experienced logistics and operations personnel, to keep staff productive and safe and to increase the diversity and resilience in their supply chains required to meet current challenges and better prepare for the future.

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