How to adapt your supply chain for an increase in demand during the coronavirus pandemic

These are strange and difficult times for the industry. The spate of panic buying has resulted in an unprecedented surge in demand, with many retailers experiencing demand normally only seen at Christmas. In addition, many in the supply chain are now grappling with manpower shortages that are causing upheaval at every level. And, with many experts predicting economic instability even after the crisis is over, it’s likely that we’ll be feeling the long-term effects for some time.

While the safety of staff is always paramount, businesses must also take steps to maintain their operational viability and minimise disruption as best they can. Here, I’ll talk about what you can do to help meet the surge in demand, while also safeguarding staff and reducing long-term economic risks.

Implement smart systems to access the latest data

If there’s one thing the pandemic has shown us, it’s that using the latest technology to stay ahead of the curve is more important than ever during a crisis.

A recent Invalua and Forrester Consulting survey found that more digitally advanced departments enjoyed greater success and faced less risk during unforeseen disruptions like the COVID-19 pandemic than those that were slow to adopt new tech solutions.

Using data-driven, intelligent systems — particularly those which connect to the Internet of Things — can greatly improve efficiency across supply chain tasks such as planning, procurement, supplier management and logistics. These systems will give you access to the latest data from elsewhere in the chain,  allowing you to become more agile in terms of responding to disruptions outside your control. So, if the crisis closes an essential factory further up the chain, or an important component goes out of stock, you’ll be able to react much more quickly.

Keep an ear to the ground with demand forecasting software 

Accurate stock forecasting is an essential aspect of an efficient supply chain during fair trading conditions, but during a crisis like the one we’re facing at the moment, it’s more crucial than ever. For many suppliers, consumer demand doesn’t behave as expected during a pandemic, meaning historic sales data is not very helpful. It’s also hard to predict how the chain will respond to the latest developments. For instance, if the government announces further, more stringent restrictions on trading — like increased store closures or reduced trading hours — then it could cause an immediate spike in demand.

This is where forecasting software comes in. Supply chain managers can use real-time data to anticipate how demand will peak and trough over the coming months, reducing the potential for human error, and ensuring that all data is leveraged to create the most accurate picture of real-time demand.

Given that the crisis will inevitably abate, and that many predict a recession will follow, businesses must be careful to anticipate when demand will drop, or they could be left with a huge surplus of stock just as demand falls. Again, stock forecasting software can help provide the most accurate picture of the market in a few months’ time.

Optimise route planning and inventory management

Depending on the nature of the stock you handle, it’s likely that you’ve seen a drastic increase in demand for certain items, while orders for others have dropped off a cliff. So, it’s likely that you’ll need to optimise your inventory management and warehouse organisation to prioritise these in-demand items.

Warehouse and inventory management software can be used to quickly create new layout plans and pick routes that shorten lead times for priority stock. Additionally, you can also use these to help safeguard staff by spacing stock and creating routes that will help employees to maintain social distancing, all while minimising disruption to efficiency levels and picking speed.

The same goes for your route planning. New restrictions are being announced almost every day, so it’s important that your business is ready to adapt at a moment’s notice. The best way to do so is to use smart transport management systems software to calculate the fastest and most cost-effective ways to move goods. Software can even be used to create new routes in real-time using GPS systems and the latest data, diverting drivers away from busy or closed routes and finding the next best solution.

Seek long term solutions to diversify the supply chain

If there’s one positive to come out of the coronavirus crisis, it’s that we’re learning a lot from it about the need to diversify and future-proof the supply chain. Moving forward, I expect more firms will seek to build risk mitigation strategies into their processes, probably by trying to diversify the supply chain to help safeguard against further disruption should one supplier fail or be cut off in future.

The most effective way to do this will involve either keeping a buffer stock in inventory so you can meet sudden spikes in demand, or looking for multiple sources of supply, which are geographically diverse. We’re already seeing firms look to source core components or part-assembled parts more locally or from multiple suppliers, and this could become a long-term solution going forward. Given that greater diversification has been championed by many as the solution to our often fragile, “just in time” supply chain, this could help to shock-proof the industry and mitigate disasters and economic instability in the future.

By Craig Powell, managing director, Balloon One

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