COVID-19 will undoubtedly transform not only the way that companies think about their supply chains but will also force them to adapt in response to the way that people now interact with retailers, grocers, restaurants, bars, and healthcare providers, among other industries. For example, virtual health or grocery online ordering and delivery services are no longer “nice-to-haves” in the eyes of customers. Within a matter of days, they’ve become customer necessities and baseline expectations.
In some ways, today’s situation is akin to a 500-year flood. After such a historic event, impacted community leaders and businesses adjust codes and practices based on the damage assessment. Flood insurance rates change, while localities redraw their flood plain maps and enforce critical infrastructure such as bridges, roads, and levies. Once the immediate impacts of COVID-19 subside, supply chain leaders must perform a similar retrospective based on lessons learned from not only the operational “stress test,” but also the accompanying customer behavior changes. This retrospective calls for a systematic, structured approach, focusing on the areas most impacted by the pandemic.
We believe that three elements of the supply chain will be most affected:
- Sourcing and vendor management
- Inventory planning
- Distribution and delivery
We also believe these elements of the supply chain present the highest potential for meaningful improvement. In this perspective, we explore how supply chain leaders—particularly those facing heightened and highly variable demand as a result of today’s pandemic—can zero in on these areas to catalyze enduring supply chain transformation. Along the way, we outline the critical questions you should ask to develop an exhaustive retrospective analysis that can help put improvement into practice.