Futureproofing supply chains in the face of uncertainty
The consequences of the Coronavirus pandemic have had serious implications on individuals and industries across the world for which no one was prepared for. Particularly in the case of supply chains, the crisis has clearly demonstrated that they are the backbone of our daily lives and any breakdown in the chain can have disastrous consequences for product fulfilment. A March survey reported that nearly 75% of companies reported supply chain disruptions in one form or another due to Covid-19.
Even as the crisis continues to unfold, there are a number of lessons that can be learned, so businesses can come out the other side stronger and better prepared. One of the key factors is that we need to look beyond just the expenses of global supply chains. In fact, we will need to strengthen some of its most costly assets – the human front-line workers. And that will include increased investment in those who are working hard to deliver products to where they need to be.
Axel Schmidt, Senior Communications Manager, ProGlove, explains the elements that must be considered when it comes to reassessing, adjusting, and redesigning supply chains to be futureproof and resilient in the face of future challenges…
Complexity and sensitivity
Supply chains are made up of a number of pricey elements, partly due to the fact that they are marked with an increasing degree of complexity. Typically, you find a plethora of agents and infrastructure components including manufacturers, service and transportation providers, fulfillment centers, hubs, technology, equipment, vehicles and – most importantly – human workers. This complexity faced with a crisis the current Covid-19 pandemic means that there is much uncertainty amongst businesses across all sectors. For example, 83% of EU-based businesses within the global automotive supply chain are ‘concerned’ or ‘very concerned’ about the ramifications of Covid-19.
Consumers – who will have to pay for the incurred expenses at the end of the day – are naturally sensitive to price increases. Customer demand is the strongest driver in the supply chain. So, while it may sound tempting to demand that organisations must spend more to get more, we must not forget the quandary they are facing. That is why today many supply chains are lean and stick to a Just-In-Time (JIT) approach.
Customers also add further complexity by buying through multiple different channels. While this multichannel approach improves the customer experience it also requires more manual work so that automation – which could be a cost saver under different circumstances – is not necessarily an option. Additionally, consumers often do not only shop for the most affordable prices, but often expect rapid fulfilment with overnight – or even same day – shipping, too.
With the current crisis, additional pressures have been placed on the retail supply chain. Consumers all over the world have been panic buying in fear of supplies running out. This created unexpected shortages, and the more the news about the scarcity spread the worse the situation got. As a result, more and more consumers took to online shopping. So, while many organisations around the world started laying off staff, retailers, healthcare suppliers and e-commerce businesses were overwhelmed with work and struggled to cope with an unforeseen labour shortage. Many businesses in these fields are now looking to hire huge numbers of additional frontline workers, with Amazon looking to hire a further 75,000 more to cope with demand.
Strengthening the supply chain
Being able to onboard new workers quickly is essential when it comes to resolving a labour shortage. Technology such as wearable augmented reality devices can be a valuable tool as it can provide a perfect training ground so that workers can master their job much faster.
Businesses need to also help their workforce so they perform well and most importantly stay healthy. Sectors that were already vulnerable to Coronavirus are under greater pressure to cut costs and keep workers safe from potential health risks. Therefore, front line workers should be supported rather than let go or furloughed, where possible. Protective clothing ought to be provided, as well as tools that enable workers to perform their roles safely and efficiently, such as wearable technology. This technology, such as wearable barcode scanners, can cut process time in half and provide instant feedback to workers which can help reduce typical picking errors by as much as 33 percent. Avoiding this source of error can be a massive cost saving as it will help prevent expensive processes such as product returns when the wrong item was sent out or time-consuming delays due to erroneous parts being removed from products.
So how can you appropriately prepare for a peak that is, or might be, coming your way? Or in other words: how do you do more with the same space? Flexibility holds the key. Thus, you need to be able to build, move and redesign workstations quickly, and then allocate workers flexibly in between. Technology, especially barcode scanning as the most important steering tool in the warehouse and inventory, needs to be flexible and IT friendly so it can be deployed and rolled out quickly and does not require countless hours of integration and training time.
Making the right match
Supply chains are all about human beings, even though it may sometimes appear differently. There is certainly all kinds of machinery, software, buildings, and transportation involved. Yet it’s human need that drives them, human skill that operates them, human ingenuity that manages them, and human shortcomings that identify the potential for substantial improvements. But rather than eliminating the human aspects, we need to strengthen and empower the human worker to allow for great enhancements. That said, it is important to reiterate that we need technology to support the frontline workers so they can deliver the best possible job.
The Coronavirus crisis has highlighted the above as it has underscored all the challenges and vulnerabilities that global supply chains currently have. Going forward, we will need to reconsider the status quo. We will need to remove complexity and promote flexibility. Technology can and will support us to do that if it is the right match – and making the right match is what we need to safeguard supply chains into the future.