8 TECH OUTLOOKDecember - 2020IN MY OPINIONBy Dave Anderson, Managing General Partner, Supply Chain VenturesWhat lesson can we learn from COVID-19 disruptions? Supply chains will need to be much more flexible, resilient to unexpected changes and able to shift sourcing or distribution in days or weeks, not months or years. Most current supply chain analysis tools rely on `old' (think 3 months ago) data on demand and product availability to plan and execute both short and long-term decisions.New real-time data sources have become available over the last decade--traffic, weather, Facebook, Twitter feeds, declared data from consumer loyalty programs, shipment visibility, among others. Existing legacy supply chain systems generally cannot input or use this data in their decision-making processes. AI/ML tools can massage both `old' and real­time data to reveal new insights about supply chains that can enhance decision making. Replacing existing supply chain `systems of record' e.g., inventory, payments, order management, financial reporting is expensive, time consuming and may not be necessary.The basic lesson being learned is that companies are going to have to adopt these newer technologies to remain competitive in the post COVID-19 world.What will be initial supply chain changes due to the pandemic? Short term, supply chain professionals will focus on patching together interim solutions to emerging issues, such as:· Scrambling to find additional material/product sources, regardless of cost--examples include loss of key tech and medical suppliers (ongoing COVID-19 plant closures in Asia& Europe), substantial increase in demand in grocery channels at the expense of food service, repurposing of plants to produce critical healthcare products· -Keeping plant, warehouse workers and drivers safe & happy--initial decontamination of facilities and vehicles; establishment of new protocols for distancing between workstations, cleaning, raising wages, increasing health & leave benefits · Instituting contact-less deliveries--minimal paper transfers among supply chain partners (truckers at delivery locations, for example), new processes for accepting deliveries, contactless tablet signing· Increasing average road speeds 30+ percent in supply chain execution models--with traffic way off from the lockdowns, drivers can increase speeds and deliveries per hour.· Modestly re-optimizing networks--closing redundant distribution operations (food service facilities, for example); inventory repositioning further down the channel; use of 3PLs to deal with shifting demands.· Prioritizing e-commerceas a key delivery channel--ship from store inventory (cheaper than returning it) for brick and mortar retail; moving inventory and fulfillment to 3PLs specializing in ecommerce.· Scrapping existing forecasting tools for present--classic tools mostly useless in the crisis and beyond; better to simulate many alternative scenarios by distribution channel.What are long term trends in supply chains processes and technologies resulting from the pandemic? These changes will focus on underlying shifts in manufacturer, distributor, retailer, and consumer behaviors which the crisis has made apparent:· Radical new sourcing strategies--more not fewer suppliers; death of JIT as we know it; more in-country safety stock. Look for technologies which allow companies deeper control into multi-tiered supply chains, including the ability to quickly shift among sources.· Faster transitions to new logistics models--direct to consumer/drop ship options will become major growth areas as consumers transition away from traditional retail. Look for the development of separate supply chains dedicated to these channels.· Office based technologies move to cloud--significant WHAT WILL BE THE NEW REALITY FOR SUPPLY CHAINS IN THE CURRENT AND POST COVID-19 WORLD?
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