August 2020 | Commentary | Good Question

What's the most significant way COVID-19 has changed the supply chain?

Tags: Supply Chain Management, Technology

The pandemic has increased uncertainty to a level never seen before in supply chains. Demand patterns are all over the place, supply lines are disrupted, lead times are uncertain, and nobody is quite sure when and how things will change going forward. Supply chain planning? More like supply chain prognosticating!

—Ryan Purcell Director of Global Impact, LLamasoft


The cost of air freight has increased, and some customers have been forced to shut down.

—Jeff Cullen, CEO, Rhenus Canada


Online commerce has exploded, and consumers won't change once the pandemic subsides. That's putting huge pressure on last-mile delivery. For truck drivers, COVID also has shined a bright and deserving spotlight on their role as essential to the economy for keeping store shelves filled. We are seeing more acts of kindness shown to our drivers, and more appreciation for the work they do every day.

—Greg Orr, President, CFI


Where companies purchase critical components for their manufacturing and production facilities will change. Companies will reassess and rebuild their vendor network closer to the United States, pending the initial implementation phases of USMCA. We foresee a need for even more cross-border expertise as many manufacturers aren't familiar with the new trade regulations on top of wanting to source more domestic materials.

—Rick Kerr, Operations Manager, Green Bay Office, Sunset Transportation



We've seen a shift toward low-volume, high-frequency, and manufacturing-on-demand strategies as companies work to preserve cash flow during the pandemic. Instead of ordering 10,000 units and storing them, uncertainty in the market is causing manufacturers to order 1,000 units at a time with greater frequency.

—Jim Belosic, President and CEO, SendCutSend


COVID-19 highlighted the critical importance of forging logistics partnerships that combine technology and experienced people. Whether shippers are looking to build supply chain resilience, nearshore supply chain elements, or navigate market volatility, technology-enabled partnerships backed by expertise are more important than ever.

—David Commiskey, VP of Customer Solutions, GlobalTranz


It brought to light just how complex supply chains are. We can no longer take for granted that goods can be moved easily and quickly through international logistics. Businesses are revisiting supply chain design and possible localization, which has caused healthy debate around resiliency versus efficiency and cost.

—Jason Haelzle, P.Eng., Food & Agriculture Sector Leader, GHD


Supply chain executives have to think more differently than they ever have before. With an urgent need to minimize the risks of human-to-human contact, supply chain leaders need to change the way they're approaching automation. Distributors are looking for smaller, more diversified suppliers rather than single-region, large suppliers.

—Nick Young, IoT Architect, OST


The COVID-19 pandemic has thrust the pharmaceutical industry into the spotlight. This challenge brings to light the importance of real-time cold chain visibility for life-saving pharmaceutical products that are shipped every day around the world.

—Tom Weir, Chief Operating Officer, CSafe


Much of the pandemic's e-commerce growth will be permanent. Both pure online and brick-and-mortar retailers will need to adjust their reverse logistics programs to accommodate higher return volumes. Store retailers will face choosing between return-to-store options for online shoppers or keeping e-commerce returns online amid store-crowding concerns.

—Ken Bays, VP, Supply Tech Product Development, Inmar Intelligence


The most significant impact is the seismic change in consumer behavior and the speed at which it occurred. Existing trends have been accelerated or amplified while others are just emerging.

—Brad Eckhart, Partner, Columbus Consulting


It emphasized the need for data sharing. 3PLs and supply chain providers that were successful from the start made operational shifts immediately—one of those was sharing information and data with customers so that they can keep up with increased demand through more accurate forecasting.

—Kevin Williamson, CEO, RJW Logistics Group


It exposed the resiliency cost. Companies that didn't invest in resiliency had no idea how exposed they were; they couldn't pivot because they were so locked into doing things the cheapest way possible.

—John McPherson, Director of Global Solutions, rfxcel


The COVID-19 crisis uncovered vulnerabilities in supply chains where paper-based processes and a lack of real-time information disrupted many. The need for further digitization of the supply chain became very apparent as a way to build more collaborative platforms with trading partners, suppliers, and customers.

—Juliann Larimer, President and CEO, Peak-Ryzex


It has changed three key components of the retail supply chain: sourcing decisions for raw materials and finished goods; agility in inventory distribution; and last-mile delivery with omnichannel fulfillment. Retailers must find innovative ways to deliver goods to consumers as fast and as cost-effectively as possible.

—Meyar Sheik, Chief Commerce Officer, Kibo


COVID-19 has caused massive disruptions to global and domestic supply chains and unprecedented logistics challenges. Trailer leasing has provided companies the flexibility and affordability to keep up with unpredictable surges in demand for essential goods as well as storage for backlog of non-essential inventory awaiting stores to reopen.

—Chuck Cannata, Executive Vice President of the Highway Division, Milestone


COVID-19 is validating for those companies that already have a high degree of automation and remote access to critical business applications. These nimbler companies' workforces have been able to manage systems from browsers on home computers, tablets, even smartphones—enabling their business to run uninterrupted. Companies that haven't automated have been forced to shut down until they can upgrade their operations or physically return to the jobsite. Additionally, panic buying has created an unstable basis for correctly understanding and predicting product demand. This means real-time data aggregation is more critical now than ever. In a pre-COVID-19 world, suppliers could create larger data sets that produce more long-term predictability. Now, manufacturers and suppliers need to rely on smaller data sets generated in near real-time in order to understand and communicate supply and demand. This method calls for greater agility across your supply chain integration points in order to respond to real-time changes.

—Mahesh Rajasekharan, President and CEO, Cleo


COVID-19 stressed the need for remote deployment capabilities of technology solutions to keep teams safe, while delivering the resources needed to keep the supply chain running.

—James Parker, Vice President of Customer Success, Vecna Robotics


This crisis has accelerated the adoption of innovative workforce management technologies and practices among organizations across the supply chain. With workplace safety and employee engagement more critical than ever, modern systems are being leveraged to adapt production schedules and team design to promote social distancing; introduce new protocols for enterprise contact tracing using workforce management data; and provide flexibility to the frontline workforce, for instance, enabling them to manage schedules remotely or swap a shift via their mobile device.

—Robert O'Dwyer, Logistics Industry Principal, Kronos Incorporated


COVID-19 has exposed supply chains that are fragile to disruption due to the rigid solutions that support them. The companies that deploy agile solutions that ensure visibility and the control will be the winners now and post-pandemic.

—Mark Goode, President and CEO, DSI


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