How COVID-19 is Accelerating the Rise of Digitalization in Supply Chain
COVID-19 has brought about a digital transformation with businesses transferring their operations to deal with restricted movement, supply interruption, and office closures.
Predictably, all industries are running in a constant state of instability, and businesses are left with no other choice but to keep redesigning their strategies to adapt to the changing behavior of the consumers. For some companies, it meant shifting from conferences, meetings, and events to virtual streaming, or replacing B2B with the direct-to-consumer model. As individuals and businesses adapt to the newfound measures, people are discovering more productive methods to perform the same task, which is already making a major impact on the digital roadmap.
While digitalizing operational processes has been on the agenda of all companies big or small, it was something they always seem to put off. Automated end to end operational processes or live chat has always been something that businesses talked about but would ultimately put it on the back burner because they could not account for the impact of internal change to support it.
Things have changed. Businesses are now implementing new processes overnight and have already adjusted to the technology and eased into the changes. This quick progression of digital processes has brought about a new mindset, welcoming the future with an open mind to give the new technology a chance.
Obstacles that used to prevent businesses from welcoming innovations hardly correlated to the technology in question. They were rather tied to an unwillingness to change existing ways of systems and bureaucracy. Now that businesses have no choice but to welcome remote working, they have become more flexible and open to trying out new approaches.
Lately, Departments have now recorded a change in priorities with regard to its clients’ digital pipeline, ranging from internationally recognized brands to SMEs. One can’t help but wonder if COVID-19 has accelerated digital transformation.
Twitter (Susanne Wolk) Digital Transformation Quiz
Predicting the Unforeseeable
In a fast-changing and unpredictable environment, the only way to adapt is to collect real-time, accurate data.
With digitized track and trace systems, you can spot your goods, locate where they are, and keep track of how they are selling. Barcoding is steadily being replaced by RFID tagging in managing this. The reason behind this is because as opposed to manual scanning, an RFID tag relays data simply by being in a sensor’s proximity. They seamlessly feed into the Internet of Things (IoT) and help you find your merchandise, track shipment conditions, and secure it to a database for scheduled invoicing, reporting, and replenishment without any human input.
In a survey recently reported by Zebra Technologies, 52% of firms out of 950 participating IT decision-makers in different organizations from 9 countries are currently utilizing RFID technology while 34% are planning to implement it in the coming years.
Business intelligence becomes a lot easier once the data is encapsulated. Dashboarding, which is centered visualization of important metrics, can now be achieved with a level of accuracy and speed that wasn’t otherwise possible. Whether you are tracking yearly freight volumes, operational compliance, or staff levels, new technology has made collecting and organizing the data painless and instant.
The advent of COVID-19 has highlighted the limitation of the human workforce and market unpredictability. Organizations are now on their way to fast-track the execution of this technology and one can expect to see a quantum leap in its adoption. Even after the economy recovers from this pandemic, it will enable organizations handling a lot of data to make informed strategic decisions. Additionally, the decrease in the physical handling of goods will also improve hygiene in workplaces.
Supplier Strain Management
Managing unpredictable demand normally forces businesses to negotiate with suppliers, use up backup resources, and order with a certain level of elasticity. When operating in a global pandemic like today, these actions are not effective enough to safeguard the supply chain.
Information is everything. How much product are you able to buy, stock, and trade? Is there a way to help struggling suppliers by negotiating another product mix or placing large orders in advance? You can only know this with accurate data about your present shipment.
In the long run, businesses will likely diversify their supplier base due to COVID-19 and change consumer behavior as we have already witnessed in situations like the tariff war between U.S.-China and Brexit. Businesses no longer rely on just one country for their manufacturing needs. Instead, they have started to diversify operations by employing neighboring countries for production or shifting it closer to consumer markets which give them the flexibility to be able to pivot if a given location faces reduced capacity.
Traversing Transportation Difficulties
Today, businesses are facing a lot of issues due to closed borders and restrictions on international transport. Those that are able to have a stronghold on the whereabouts of their shipment at any given time gain a competitive advantage. When a business is able to locate where exactly a shipment is holding and how long it will take to arrive, they gain the maximum level of flexibility should it be delayed or routed.
For instance, slow steaming has become quite common in the industry. This is an intentional choice of opting for slower methods of transportation in order to delay the delivery of non-perishables. By this method of “floating storage”, it buys time for the destination warehouses to create space for storage or find other ways to market in case of closed primary outlets. Such a strategy can be pulled off only with the help of accurate tracking processes which in turn will allow an unparalleled chance for responsiveness.
With the help of a reliable logistics partner, you will be able to navigate disruption. Find a partner that will be able to provide real-time updates on transit options and supply chains. Some years back, this would have taken several weeks to develop such a sophisticated view. But thanks to advanced technology, it has been reduced to minutes.
Moving Stagnant Stock
Businesses today are still investing large sums of money into leased or owned physical spaces and in certain cases, it is done without simultaneously building their online channels or presence. This pandemic is exposing the defect in failing to provide an omni-channel, with even powerful organizations having a hard time to move stock.
As the saying goes, the best time to develop your website would have been ten years ago; now is the second best time. As retailers, a central part of their strategy for growth should be e-commerce. When it comes to client inquiries, service providers must have a lead-generation website. Businesses sometimes need to be conducted face to face however, brands today require a reliable digital home. When you invest in the power of online presence, it unlocks a whole new world of global business opportunities to boost sales by connecting with customers.
Should your stock pile up, you will get sufficient warnings through the digital tracking systems. This in turn will give you enough time to pivot. A good way is to shift your non-perishable products to another space in your network. Diversify your offering by redeploying your unused equipment. You can also donate your surplus perishables to local charities and shelters as a goodwill gesture.
Supply chain technology has become accessible and powerful like never before and businesses that make use of it will pull through this pandemic. As we steer past the effects of this global disruption, both shippers and logistics companies will come to see that investing in automation and data furnishes the power to make agile, smart decisions.