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These 5 Pandemic-Driven Supply Chain Changes Need Watching Featured

These 5 Pandemic-Driven Supply Chain Changes Need Watching "First watches"

As vaccine rollout begins to catch momentum and countries show signs of putting coronavirus under control, attention is now being turned to the recovery of the economy and the sectors that have been severely affected. One of these areas is the supply chain, which forms an integral part of everyday life. The supply chain management will emerge differently from the pandemic, with transformation expected in transportation, logistics, and warehousing. Here are some most significant trends that you should expect in 2021 going forward that will influence companies and their strategic plans.

  • Outsourcing

Last year, companies found out that outsourcing their supply chain activities and services is one way of reducing risk, enhancing flexibility, and minimizing cost. As we move towards the middle of 2021, we should expect outsourcing to be accelerated thanks to the pandemic's long-lasting effects. This trend will continue into 2022.

  • Digitization

Digitization has been a refuge to many supply chain companies during the pandemic, and it will remain so going forward. Although the drive towards automation was already rising, the importance of digitizing operations has been reaffirmed by the disruption occasioned by the virus. As the pandemic intensified, the organizations that had implemented automation quickly responded to the demand while enabling productivity. This is the reason why you should expect more adoption of automation going forward.

  • Nearshoring

While offshoring is a good thing, sourcing items from a far destination was proven by the pandemic to be a big vulnerability that can cause unavailability of goods. As such, many companies are moving towards near-shoring to mitigate impacts of disruptions such as those caused by the pandemic on the supply chain. This is making companies look for efficient ways to increase efficiency by redesigning their networks and implementing lean inventories. We should expect companies like those in the US to move their supply chains to countries like Mexico from East Asia to cut transport costs and make items available nearby.

  • Ecommerce

The coronavirus pandemic has stressed the importance of online shopping in the modern era. Although ecommerce was already rising before the pandemic, its significance became evident during the lockdown, which limited in-person shopping. Online shopping will continue to increase faster than initially anticipated before the pandemic. This will speed up the adoption of ecommerce by retailers both large and small as they look for ways to remain operational post-pandemic.

  • Intelligent forecasting

Consumer behavior changed drastically during the pandemic. This made historical trends that were used to forecast and manage inventory almost obsolete. As things come back to near-normal, many companies will rely on big data, artificial intelligence, and machine learning as they seek to better their forecasting abilities. These technologies will claim a big place in supply chains as organizations aim to become competitive in a fast-changing business landscape this year and in the future.

  • Short and more complex product life-cycle

Companies are now under pressure to develop innovative products. For this to be achieved, companies need efficient lifecycle management processes. This includes emphasizing the management of new product introduction, discontinuation, design, and leveraging product and infrastructure characteristics. With the pandemic, these aspects are expected to change to address the emerging challenges that occurred during the pandemic and even after.

  • Distributed product sourcing

 One of the biggest issues that the pandemic has uncovered is the overreliance on consolidation. As the virus affected different regions disproportionately, supply chains that came from a single source faced many disruptions. On the other hand, companies that were flexible and distributed were resilient and capable of adjusting to the changes. Post-pandemic, companies will increasingly adopt distributed sourcing to address over-reliance on a single source.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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