The COVID pandemic instantly remade and shined a spotlight on global supply chains. People who had never heard the phrase “supply chain” before were now considering how the products they utilized daily arrived at their nearest store. In the first half of 2020, U.S. shoppers seeking to buy paper towels, bottles of hand sanitizer or China-manufactured durable goods such as exercise equipment often met empty store shelves. Even food staples such as bags of all-purpose flour disappeared from supermarkets, not because of a bad wheat crop, but because of logistics bottlenecks related to producing the specialized paper sacks in which they’re sold, as Amanda Mull of The Atlantic explained. At the same time, other supply chains have proven more resilient. Let’s look at a few examples.
Online retail
Amazon is legendary for the speed and efficiency of its supply chain, which historically has reliably delivered items within just a few days to Prime subscribers. Nevertheless, the company saw such a surge of orders in the immediate wake of COVID-19 that it initially struggled to keep up with demand. In response, it prioritized essential high-demand items like hand sanitizer and limited the amount of storage for sellers in its warehouses. As CNBC explained, Amazon’s decision to bring most of its fulfillment in-house has been a double-edged sword in this context. Fulfillment by Amazon enables a consistent and fast customer experience, but it also creates a single point of failure.
Healthcare PPE and infrastructure
Healthcare organizations have faced the most high-stakes supply chain challenges of the COVID-19 era. From ventilators to personal protective equipment (PPE), hospitals, clinics and physician’s offices have struggled to ensure sufficient availability of multiple critical items. But many have since stabilized their supply chains even under immense operational pressure. Northwell Health, which operates 23 hospitals and is New York’s largest healthcare employer, leveraged its 85,000 square foot distribution center in addition to a partnership with Penske Logistics to keep PPE flowing. Meanwhile, U.S. ventilator manufacturing increased exponentially in March 2020, per AdvaMed estimates, and fabrics normally used in making goods such as mattresses were instead redirected toward PPE production.
Basic cereals
An April 2020 report from the United Nations World Food Programme found that supply chains for basic cereals (rice, corn, wheat, etc.) had held up well against COVID-19. This fits with Mull’s point – it wasn’t food but food packaging that created supply chain complications in early 2020. However, the agency did warn against the prospects of panic buying as well as the inherent risk of needing to constantly move food from breadbaskets around the globe.
Port of entry security
In May 2020, the U.S. Transportation Security Administration (TSA) highlighted its ongoing supply chain successes, despite coronavirus-related disruptions. The TSA has a complex supply chain underpinning its security operations. Its agents and supporting staff need a lot of gloves and cleaning supplies, not to mention all those ink pens to mark up boarding passes. Printer toner cartridges and paper are also key components of daily TSA operations, rapidly consumed and in need of constant replenishment.
Building a more resilient supply chain in the COVID-19 world
Advisory firm Bain & Company has chronicled the material costs of supply chain disruptions and zeroed-in on what organizations can do to make their SCM operations more resilient going forward. Per Bain, previous crises such as earthquakes in Japan and floods in Thailand have triggered billions in lost sales and market capitalization values for organizations in industries like consumer electronics and automobile manufacturing. The scope of COVID-19’s human and economic damage is far beyond these incidents.
On the supply chain side, steps that can lead to resilient supply chains include:
- Implementing cloud-based systems that are easier to scale, access and modify than on-prem alternatives.
- Setting up applications that deliver real-time insights into demand, plus the levels of critical parts that may be available from only a single manufacturer or location.
- Using predictive analytics to model which sites would be at the greatest risk of disruption in the event of a crisis.
- Partnering with new manufacturers, logistics providers and solution implementers to reduce delays and eliminate bottlenecks.
How has your business faired during the pandemic? As an experienced Oracle partner with integrated supply chain solutions suitable for multiple industry verticals, Inspirage can help your organization find its way toward a stronger, more flexible supply chain. Learn more by contacting our team or exploring our Resource Center.
