The Future of Supply Chain after a Pandemic

In the wake of the COVID-19 pandemic, we have seen changes in every facet of life. The supply chain has taken a toll and now it’s more important than ever to be prepared for what comes next. As far as the supply chain goes, there is no going back to where we were before. There is only the opportunity to make it stronger for the future.

COVID-19 has impacted our global economy in ways we never thought possible. The shortage of toilet paper early in the pandemic is just one, clearly visible instance of how customer demand changed our supply chain during the last several months. Even now, you may still be noticing higher shipping costs with slower shipping times. Everything is connected back to the supply chain and logistics.

But how have our global supply chains reacted, and what can we do better in the future to make our economy stronger?

The Future of Supply Chain: Post-COVID Planning & Logistics

A new report on Supply Chain Resilience by BCI aims to answer these questions by looking at pre-pandemic planning, supply and demand during the pandemic, digitalization and outsourcing in the supply chain and logistics industry, and more.

The pandemic is changing how we think about going to work, entertainment, and more today, but it also begs the question of “What about tomorrow?” Organizations have to rethink their planning, and 53.2% of surveyors say that they will have a comprehensive pandemic plan going forward. Another 32.3% say that they will keep their generic plan in place, but will be sure to consider the supply chain in greater detail.

Where is the US Supply Chain Headed?

MHI also predicts that the global supply chain will not only have technology changes, but also location, by looking to more local and regional companies for sourcing, manufacturing, and delivery. Outsourcing manufacturing to other countries with lower labor rates caused the US supply chain to be more brittle. These weaknesses were exposed by the pandemic. Now, more companies are looking to reshore manufacturing by bringing it back to the US. This helps grow small businesses and reboot the US economy. Working with local suppliers also allows for easier supply chain management, quicker turn-around, and lower logistics costs while also obviously contributing to the strength of local economies.

Reshoring is only possible, though, because of an increased use of automation. Turning to technology offers new solutions for supply chain strategies because robotics and digitalization are now more cost-effective than ever before. Automation is easier to utilize and less expensive, making it a possibility for not just larger companies, but small- and medium-sized ones as well. As labor rates grow worldwide, this technology helps save money while also streamlining processes and improving productivity.

Employees are needed most for the work that requires specialized skills and critical thinking. Rather, machines are useful for more dangerous or tedious tasks. The question is whether or not the industry will embrace this mindset ongoing because of the present necessity. 

Although the pandemic has certainly impacted job loss, we don’t believe automation must further that strain. Overall, automation greatly protects employees from harm that can come from certain activities. During a time when social distancing is mandated, automation offers an additional way of keeping employees safe by allowing for that distance, which also helps organizations remain compliant yet productive. Organizations have lower costs of entry to automation, now more than ever.

These are only a few possible outcomes for the supply chain at a time where the scope of changes is enormous. Whichever way the supply chain goes, though, one thing is for certain: it’s not staying the same. The ability to be resilient and flexible is going to be a major part of planning for the future and strengthening supply chain organizations.