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Covid-19 Has Changed the Global Supply Chain Featured

Covid-19 Has Changed the Global Supply Chain Elena Mozhvilo

After almost a year of coronavirus pandemic, it is apparent that the pandemic has significantly strained the industry in a manner that no one has ever seen before. With the pandemic, it has emerged that the supply chain is the backbone of modern businesses. Although these challenges might have impacted the supply chain and logistics industries now, it will ultimately result in more resilience in the future. Here are some changes that the coronavirus pandemic has introduced to the global supply chain:

  • Increased expectation for more visibility and resilience

The coronavirus pandemic has tested the resilience of the current supply chain, and it has been found wanting to a larger extent. After the pandemic is put under control, companies will require more flexibility in the industry. The pandemic has shown the need for more visibility and resilience, that can only be known after performing many stress tests. Supply chain managers should expect higher standards from the industry players and high transparency levels, including regular stress tests.

  • Increased regionalization

COVID-19 has shown the importance of domestic sources in their manufacturing services and most operations. With the disruption that occurred on the traditional routes, supply chain companies and even governments will move their services towards regionalization. Alternatively, companies will create supply chain hubs to move closer to the customer. This is not to say that global supply chains will be no more. Instead, companies will prefer their partners to be closer. For example, for companies in the US, most operations will be near-shored to places like Mexico, from Asia, which has long been a favorite to many.

  • Automation will continue

Automation has been proven to be the leading driver of efficiency in the supply chain industry. With the pandemic, robotics and its proven efficiency will continue being implemented at a much faster rate than earlier expected. The pandemic has brought into light the weaknesses of the human-only working environment. After COVID-19, supply chains are likely to implement a more automated working environment. An example is Amazon, that has already implemented automation but is advertising other positions to ensure balance. This means that although automation will continue being embraced, humans are expected to be hired to maintain balance in the business.

  • Artificial Intelligence will be increasingly adopted

Post-COVID-19, supply chain companies will seek ways of enhancing decision-making and speeding up various processes. This will see the rise in AI adoption, that promises to enhance efficiency, flexibility, and decision-making. AI will allow supply chain companies to deriver patterns from data, and get alert on potential disruptions, highlight bottlenecks in operations, and improve service provision in general. Supply chains may use AI-based bots to offer customer support or use machine learning, a subset of AI, to customize services.

  • Need for new tools and cost models

With the coronavirus pandemic, it has emerged that there is a need for new cost models and tools to enhance the supply chain firms. Organizations will seek new ways, tools, and technologies that will offer greater intelligence. Supply chain companies are now looking for risk evaluation tools that can allow them to find patterns regarding risks or opportunities in macroeconomic, exchange rate, and other critical data. Company executives are also forced to consider tools that are alternatives to the existing transportation and logistical approaches because the pandemic proved that the existing methods are not effective as it was earlier thought.

In a nutshell, the COVID-19 pandemic has taught organizations and supply chain companies to move towards resilience. The pandemic experiences will lead to a more resilient supply chain with the ability to withstand disruptions.

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Scott Koegler

Scott Koegler is Executive Editor for Big Data & Analytics Tech Brief

scottkoegler.me/

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