If the pandemic did something, it was to stimulate questioning and rethinking how we do things. This has occurred, at the business level, in all economic sectors and the day-to-day lives of the population.
In the logistics sector, questions have been raised about how agile and flexible value chains were, both from the supply, autonomy, and national security points of view.
In the last 10 years, regionalizing the supply chain has been a trend that has been developing, but COVID-19 accelerated this thinking, making it a reality.
The original rationale for sourcing and offshoring to low-cost labour markets and then shipping to consumer markets, made perfect sense in a previously highly automated supply chain world and to some extent before the “green supply chain era”.
With the rise of fully automated manufacturing, the cost of labour becomes less of a concern. It is rather the cost of energy, taxes, ease of doing business, fiscal stability, and similar areas, that become fundamental for decision-making.
Three areas have been accelerated by the COVID-19 situation.
The global pandemic put pressure on the supply chain in ways never seen before, forcing many companies to seek expertise, advanced digital capabilities, and accelerated e-commerce operations.
- Outsourcing. In 2020, many companies recognized that outsourcing their supply chain activities to specialists, particularly those with an integrated end-to-end offering, enabled them to reduce risk, increase flexibility, focus on their core business, and respond quickly to market changes. This trend is expected to continue this year.
- Digitalization. The push towards greater automation was already underway, but the importance of digitalization was reinforced by the pandemic. Companies that made investments in digital technologies were able to respond rapidly to demand fluctuations, while allowing productivity increases to absorb additional volumes, even with strict social distancing protocols.
- E-commerce. The huge increase in online shopping will remain at a higher level than originally anticipated after the pandemic. The e-commerce user adoption accelerated nearly a decade faster, in just a few months. The unpredictable consumer behaviour has made forecasting difficult and underscored the value of being able to react fast to customer needs and demands, through a well-thought-out strategy and physical infrastructure roadmap.
Keys for creating resilient value chains.
It is worth pointing out three critical aspects to focus on to achieve resistance and recovery capacity:
- Viewing and tracking shipment from start to finish.
- Improve flow speed of real-time information.
- Unleash responsiveness to act quickly on the insights presented by data.
For this, technology and more specifically the power of data, are key players. The logistics sector is moving towards automation, monitoring, and real-time reaction. So, it is already an urgent need. The market is changing, and logistics will never be the same again.
Supply Chain Resilience Technologies.
A great enabler of resilience is technology. An analysis and questioning of current systems, plus the design of logistics digitization strategies, is the ideal combo to take advantage of the learnings from the past 2020 and generate new ways to lead in times of uncertainty.
These three technologies lead the logistics systems revolution in their different applications and will set the course for what logistics will be soon:
Autonomy for supply chain sustainability.
There are currently solutions under development to generate green alternatives with technology as a facilitator.
An example is the first autonomous zero-emission container ship developed by Kongsberg Gruppen.
3D printing in the supply chain.
3D printing is a technology that will further boost resilience capabilities. Customer demand for shorter lead times drives revised needs in supply chains.
Here we can see how integrating 3D printing into the supply chain helps build resilience amid severe supply chain disruption.
Solutions for real-time monitoring and action.
The development of IoT, big data, predictive analytics, and AI has enabled different levels of speed, transformation, and efficiency. Which is largely enabling more resilient supply chains and supply chains that are perceived as more adaptable and customized, as well as operating more profitably, with less waste and oversupply.
These technologies are key to transforming global supply chain models, given complex logistics networks, rising disruption costs, sourcing needs, and a lack of end-to-end visibility and predictability.
An example is TCS Logistics Optimizer. A solution that uses IoT based on AI (Artificial Intelligence) and ML (Machine Learning), built to synchronize operations in the supply chain management process and improve visibility throughout the value chain.
This type of solution generates control over the supply chain by creating interconnected systems to have real-time visibility and predictability. This helps us to anticipate problems, provide solutions on the spot and generate intelligence that allows us to innovate continuously.
The pandemic has forced many organizations to prioritize their supply chain resilience. Organizations are prioritizing it to promote significant change in the supply chain and adapt to the new normal. 2020 has brought constant change and unpredictability, companies with resilient supply chains will be more successful and will be able to have the greatest impact. This is one of the 2021 greatest challenges.