The Changing Face of the Supply Chain
By Nicholas Bell, CEO, Decision Inc.
The global coronavirus pandemic has impacted the supply chain industry in several ways, many that will change it forever.
It has been a year of complete and comprehensive change. The 2020 pandemic has altered the way people work and live. It has changed the ways in which different sectors approach business and growth. The supply chain has perhaps been one of the most dramatically affected business areas, as it carries the ripples of change from manufacturing, retail, and customer. According to Nicholas Bell, CEO of Decision Inc., the supply chain has been defined by disruption throughout the pandemic.
“There has been disruption from a sourcing perspective as there have been significant challenges faced by the manufacturing sector,” he adds. “The routes to market are also being affected by the travel bans and border shutdowns, reducing the number of available channels that companies traditionally take to market.”
In addition to this, customer demand is changing. Some products have seen a large drop in sales and need while others have seen surges in demand. These huge spikes in demand have a material impact on the supply chain. The bullwhip effect then circles back to the manufacturing sector, causing further disruption. The entire ecosystem is struggling to stand on unstable foundations that are shaken by constant uncertainty.
“The repercussions of this are going to be very material and very disruptive,” says Bell. “The markets are volatile, customer demand is variable, and uncertainty is the only certainty. The long-term effect of the pandemic will vary from industry to industry and on how specific regulations and lockdown requirements have affected their routes to market or access to materials.”
This is not coming as a huge surprise to the supply chain. From the outset, it was clear that no market would be left unharmed by the virus, and that no supply chain would be left untouched by the global changes in legislation and access. This material impact on the customer, manufacturer, and supply chain service provider will likely be felt for some time to come.
“This is further complicated by a lack of liquidity in the market,” says Bell. “If customers cannot afford to buy from retailers, then distributors can’t sell either. This has long-term repercussions. Manufacturers are also experiencing these challenges as they are struggling to source the raw materials they need and to fine-tune their offering to meet market demand.”
This disruption and volatility may present a bleak outlook right now, but it is not one that cannot be overcome. The market may not know what is coming, but there are strategic steps that the supply chain can take right now to protect and stabilise its foundations.
Step 1: Focus on the Client
“Your clients are as concerned about the future as you are right now,” advises Bell. “This is an opportunity for you to work with them and to find out how you can support their business needs. By doing so, you are making yourself invaluable to them. You are building a partnership that can potentially help you both survive and thrive in the coming months.”
Partnerships are key. Working collaboratively with clients can potentially open up new markets and opportunities. In 2008, the market crash saw many companies struggle to find their financial feet. Yet those that grew despite the challenging market were the ones that constantly sought out new opportunities and partnerships.
Step 2: Be Adaptable
“You need to be adaptable right now. You need to find pricing and payment strategies that clients can consume. Additionally, you need to move away from rigid thinking,” concludes Bell. “If you can take a more flexible and longer-term view, then you are not only stabilising your own foundations but those of your customers as well.”
While the markets and the pandemic remain in uncertain flux, the supply chain industry is facing disruptive times but with a strong focus on partnerships, agility, and the future, it can do more than just survive what lies ahead. It can thrive.
Find out how Decision Inc. harnesses world-class technology to optimise the supply chain: https://decisioninc.com/function/supply-chain.