The pandemic has upended almost every aspect of our personal and business lives. And now we’ve heard talk about this “new normal” for what seems like forever. Today, uncertainty is the only certainty.
The massive disruption in the supply chain caused by the pandemic is historic by any measure. The visibility to and the impact of this disruption is also unprecedented. Supply chain professionals have had to react in heroic ways to get things back on track as quickly as possible.
But those who work in supply chain are not strangers to working in high intensity, high pressure, stressful and demanding situations. Part shortages, production stoppages, delivery challenges, cost and profit pressures, cash flow problems, quality issues, supply-demand gaps, and disasters of any kind are all problems that fall onto supply chain for resolution. This is absolutely NORMAL in supply chain.
However, the pandemic has stretched and redefined even what supply chain leaders consider to be normal. So, while we hear about the “New Normal” as it pertains in our personal and working lives, there are many aspects which can shape a “New Normal” for Supply Chain.
So, what can we expect from a New Normal in Supply Chain?
- Outsourcing
Many companies will be reconsidering their outsourcing strategies. In some cases, they will want to outsource more and in other cases they will want to outsource less. - Dual Sourcing
A clear problem highlighted by the pandemic is with single sourcing strategies. By using raw materials or components that are only manufactured by a single supplier, with no alternates, any disruption with that supplier can immediately shut down an entire supply chain and an entire company. - Automation
Companies will need to invest in more automation to reduce their dependency on human operators. Typically, the business cases for these investments do not factor in the extreme scenarios we have experienced with the pandemic, but they will need to in the future. - Newfound Respect for Supply Chain
For far too long many aspects of supply chain have been considered necessary but non-strategic back-office functions. But if there is any possible positive to be taken from the pandemic it is that supply chain is a vital and strategic part of the success and survival of any company and any government. A lack of investment in supply chain has been proven fatal for many. - The Digital Supply Chain
In a Digital Supply Chain world there is real time visibility as to everything going on in every aspect of a supply chain. This visibility allows for real time analysis, decision making and responsiveness to whatever is going on. The Digital Supply Chain is the future, and it is the single biggest overall weapon to improve the ability to manage any further disasters which may, and will, come our way.
As conditions improve it will be tempting, and in many ways unavoidable, for people to go back to their old ways of living and working. Time can make people forget the devastating disruption the pandemic has wrought on all of us. In the new normal, companies will need to pivot to adapt and demonstrate more resilience than those stuck in a mindset of doing things the way they’ve always been done. That’s because major change will be needed to survive—and thrive—within an ever-evolving climate of increasing consumer expectations; skyrocketing prices in various sectors; and an unpredictable supply chain that’s creating a major chasm between supply and demand.
sources:
https://supplychaingamechanger.com/defining-the-new-normal-in-supply-chain-whats-normal-anyways/
https://www.clnusa.com/post/a-new-normal-for-the-supply-chain
https://www.gep.com/bulletins/how-covid-19-would-redefine-procurement-and-supply-chain-strategies
