5 key supply chain takeaways from 2020
In our final instalment of Supply Chain Enabled™ for 2020, we have gone a little reflective on the state of our supply chains.
When we started Supply Chain Enabled™ we wanted to capture the things that companies, and professionals, could achieve through supply chain.
In that spirit, we wanted to finish what has been an extraordinary year with a look back at some key takeaways from the year just gone, and some thoughts of how our supply chains could make the world a slightly better place in 2021 and beyond.
Many of us have learned a lot about the state of our supply chains over the last 12 months. The plans for the calendar year were effectively in the bin by February / March,
and supply chains operated in an environment with disrupted manufacturing, disrupted transportation, the shutdown of retail channels, and a rolling global
health and economic crisis.
In this environment, our interactions with clients highlighted five key takeaways from the year:
- Agility and adaptability.
- Our previous assumptions about the scale of potential supply chain disruptions were well short of the mark and yet many supply chain teams performed admirably in the most difficult circumstances
- Skills that we would normally associate with disaster recovery – rapid assembly of information, key decisionmakers aligning on decisions with imperfect information, and ensuring regular communication with suppliers and customers became the order of the day.
- Traditional response times were cut, businesses responded to rapidly changing circumstances and many executives now wonder whether they should maintain more of this capability in future supply chain models.
- Accelerated retail shift to online
- Disruptions in brick-and-mortar retail, concerns about safety and the convenience of online, drove what we believe will be a doubling of ecommerce volumes in 2020. Clients that we have spoken to have experienced between a 100% and 800% growth in online orders across an extended holiday season.
- This has not been without its challenges as the volume bubble flows from suppliers to warehouse operations and through to last-mile delivery to customers. There have also been casualties in the high street resulting from this disruption and change.
- 2021 will require reconfiguration of supply chain capability and capacity models to cope with a continuation and growth of this volume into the future. Expect increases in automation and further innovation in packaging and last-mile delivery models.
- Remote and frontline workers prove their value
- The efforts put in by front-line workers in manufacturing, retail, and transportation were a significant factor in ensuring the success of supply chains in 2020. When other parts of the economy shut down, these workers continued to ensure that products were made, shelves were filled, and customers were served. Their visible presence reinforced the critical roles that they play in the quality of service delivered to customers.
- Others in supply chain adapted their work practices to a world of remote working and online meetings. The accelerated use of technology enabled a collaboration that was previously only considered possible in person. While there have been some limitations, many of these practices are expected to continue as the ‘new normal’ in the management of global business.
- Accelerated speed to market
- The development, approval, and bringing to market of vaccines for the world’s population within 12 months is just one example of the acceleration of cycle times driven by need in the context of a global pandemic.
- Similar results were demonstrated in the efforts to source, qualify, and retool supply chains to produce PPE at scale and to react to demand shifts in other critical products. Communication was faster, process steps were conducted in parallel, and new processes and technology were deployed to enable faster collaboration and results. The best elements of this approach will be taken forward into the future.
- It would be a mistake to think that every supply chain performed well under the pressures from the pandemic. Many mistakes were made and critical vulnerabilities within supply chains were exposed.
- The work of identifying these vulnerabilities and redesigning supply chains for the future has already started. Even those that did adapt, will take the opportunity to learn from mistakes, to take forward a stronger supply chain into the future.