Managing the Digital Supply Chain in a COVID-19 World

As supply chain partners are being forced to do more with less, technology has an ever-increasing role to play. Those organizations willing to invest in virtual supply chain technology can expect:

• Greater visibility throughout the supply chain, including production monitoring, quality control, and assessment.
• Earlier identification of sourcing, manufacturing, or transportation risks and issues.
• Better supply chain agility and resilience for enhanced contingency planning.
• Stronger collaboration and communication between stakeholders.

Virtual supply chain technology doesn’t just help you to keep your employees safe and manage pandemic-related risks—your business can also:

• Reduce supply chain costs by minimizing delays, understanding expenses, and enhancing quality.
• Increase productivity in the supply chain by monitoring the end-to-end process, streamlining tasks, and getting deep operational insights.
• Maximize efficiency in the supply chain by eliminating waste, centralizing communications, and allowing for greater control.

Click here to watch our video on Supply Chain Management in the Post COVID-19 world!

We’ll explore some of the key impacts of COVID-19 on the supply chain, and show how the right technology can transform supply chain management in an uncertain and rapidly changing world.

Supply chain issues worsened by the COVID-19 pandemic

COVID-19 has impacted every part of the global supply chain. According to a McKinsey report, the crisis means:

• 73% of stakeholders have had issues with suppliers.
• 75% experienced problems with production and distribution.
• All respondents in the food and consumer-goods industries had supplier, production, or distribution interruptions.
• 85% struggle with inefficient supply chain technology.
• 48% said remote working has slowed down decision-making.

In our experience, specific pandemic-related supply chain issues include:

• Traveling to see suppliers, managers, and other partners are difficult and potentially unsafe.
• Trade Shows, events, and conferences are canceled, making it hard to manage consumer trends, product ideation, and sourcing. 
• In-person, independent monitoring, quality control, audits, and assessments are much more complex.
• Generic communications tools, like email, are not suitable for rapid, reliable supply chain reporting and communications—especially for remote workers.
• COVID-19 disruptions and delays are showing gaps in risk mitigation and contingencies.
• Supply chain stakeholders are under huge pressure to do more with less as revenues and profit margins come under increased stress.

How supply chain stakeholders can manage COVID-19 related issues

Supply chain organizations need to get on the front foot, and according to McKinsey, industry leaders are prepared to invest significantly.

“Respondents see an urgent need to get better control over supply-chain technology, using a skilled workforce trained to use new digital tools at speed and scale… …Just over half also expect permanent changes to their planning processes, such as greater centralization of planning activities, shorter planning cycles, and introducing advanced-analytics techniques. 

Intriguingly, only 11 percent of respondents said that budgets were a constraint on their ambitions to make these changes, suggesting that resilience requires smart investments, not just pouring money into the supply chain.”

McKinsey, Resetting supply chains for the next normal

We believe that technology can enhance the virtual supply chain in multiple ways:

• Allow for virtual trade shows and showrooms that offer better digital product sourcing, ideation, and trend identification.
• Support remote supply chain managers and other workers through industry-designed, best practice collaboration, and communications tools.
• Maximize data transparency and reporting to allow for accurate, real-time supply chain decisions, and avoid disruption.
• Enhance self-reported quality control, remote production monitoring, assessments, and factory audits to ensure requirements are being met.
• Lower costs, maximize efficiency, and streamline production so you can do more with fewer resources.
• Automate repetitive, low-value supply chain processes so employees can focus on high-value strategies and tasks.
• Create more agile supply chain relationships to shorten lead times and get to market faster.
• Ensure supply chain resilience through strong risk management and early identification of issues.

Let’s dig into some of these and see how you can take advantage.

Use virtual showrooms for product ideation and digital sourcing

Although traveling to suppliers is challenging and many in-person events are canceled, you don’t need to stop your product sourcing operations. Increasingly, you can digitally source products online through virtual showrooms. One great example is Alibaba, who put on 20 digital tradeshows during the height of the pandemic. 

Interactive media and other technologies allow product category managers and their teams to virtually experience the latest products and understand consumer trends. You can drive up supply chain sourcing efficiency too—the right supply chain platform lets you:

• Receive and organize product ideas from suppliers and partners.
• Analyze marketplace and consumer trends to identify cyclical and new product trends.
• Scan multiple suppliers to ensure they meet your quality, compliance, employee responsibility, pricing, and other needs.
• Request quotes from suppliers, place, and track orders from request through to fulfillment. 
• Understand and shorten lead times to get to market before your competitors.

Empower remote supply chain employees and stakeholders

Businesses are discovering that remote work doesn’t negatively impact how much gets done—in many cases, working from home or a remote location enhances supply chain productivity. This is a time to optimize for remote collaboration so that every employee, partner, or organization in the supply chain is working to a common goal of speed, quality, and efficiency:

• Centralize communications onto a single supply chain platform to allow for extensive collaboration across all parties.
• Integrate with third-party supply chain systems and processes to create “one view of the truth” so everyone is working to common standards and understanding.
• Turn obscure metrics into valuable insights with analytics that let your people maximize business value and make smart decisions.
• Identify potential risks, issues, and problems early to minimize disruptions and put contingency plans in place.
• Focus on real-time reporting and tracking, to ensure handovers and other processes run smoothly.

Ensure product quality and compliance through factory monitoring and audits

Supply chain managers must ensure that suppliers and manufacturers are meeting quality standards, complying with your agreements, meeting local laws, and resolving any production issues. With COVID-19 limiting independent on-site inspections, organizations can take advantage of self-assessments and audits. Supply chain platforms can help you achieve this through several methods:

• Use in-factory cameras to remotely monitor production lines for quality, accuracy, and speed.
• Audit specific areas to ensure supply chain organizations stay compliant with SLAs, governance, and employee responsibilities.
• Request and track self-assessments from suppliers and ensure they follow your protocols and processes to maximize efficiency and productivity.
• Interact with remote quality inspectors across all aspects of their reviews.
• Track a steady supply of high-quality products, from sourcing, through manufacturing, to distribution and onward sale.

Drive down supply chain costs and do more with fewer resources

Streamlining processes, maximizing productivity, and focusing on efficiency – all help to build resilience and agility into the supply chain. At the same time, pressure on profit margins means you need to drive down costs and do more with less. Supply chain platforms can help you get control of your expenses:

• Understand fixed and variable costs for each part of the supply chain. 
• Create transparency and use custom analysis and reports to monitor prices.
• Stay aware of economic, environmental, and other factors that can increase supply chain risk and cost.
• Identify problems with speed, quality, operations, and handovers that create waste and result in rework.
• Implement and track improvements in the supply chain to reduce and control costs.

Focus on supply chain costs, efficiencies, and productivity during COVID-19 and beyond

While it’s true that COVID-19 has compounded supply chain issues, the investments you make and the solutions you put in place now will last well beyond our current crisis. The pandemic exposes all of the flaws, so it’s an ideal time to understand just what is, and isn’t working—and to build resilience, speed, and responsiveness into your supply chain. A combination of digital transformation and agile software platforms let you tailor the technology to your operations, and drive improvements throughout.

Step forward into a world of data-driven decision making, transparency, risk management, and cost control to ensure you can manage any crisis and continue to thrive.

Topo is a whole new breed of supply chain management software. It is a powerful collaboration, automation, and analytics platform connecting all sourcing, quality, compliance, and sustainability stakeholders. You can collaborate with all members of your in-house team, manufacturers, and service providers throughout your supply chain.