How the Supply Chain Industry is Coping with Changes in Demand
Over the last several months, businesses across the board have been impacted in one way or another by the COVID-19 pandemic. Among the most notably affected at the beginning of the pandemic were the retail and supply chain industries which faced huge spikes in demand for household supplies and non-perishable food items.
To understand how the supply chain industry has reacted to the events of the last few months, we spoke to Gareth Bennett, Head of Product Strategy at OmPrompt, an intelligent solution provider designed to automate order management processes and an InterSystems customer. Here, Gareth tells us about the impact COVID-19 has had on digital transformation in the supply chain, how retailers and suppliers can better collaborate, and the most effective ways to prepare for unexpected surges in demand.
How has digital transformation in the supply chain been impacted by COVID-19?
Digital transformation has really accelerated during this period. Almost overnight, the majority of supply chain organizations were faced with enormous increases in demand and many of the more traditional operations haven’t had the scalability or flexibility to handle that. During the peak of the pandemic, some businesses saw a 400% increase in sales in one week alone – it was like several Christmases rolled into one! For these organizations, not having the technology platforms underpinning the critical processes that support fulfillment and experience was extremely challenging and this need really accelerated digital transformation.
The crisis has highlighted the gaps and weaknesses in mission critical supply chain processes for a lot of businesses, and many have had to start to accelerate some digital transformation plans in order to plug those gaps and gain some resilience. I’ve noticed that B2B commerce, in particular, has been driven to increase efforts as they attempt to lean out processes, offer better customer experiences and try to learn from B2C environments. Meanwhile, supply chain organizations that were further along in their digital transformation journey have been better able to quickly adapt to changes in consumer behavior.
How important is a 360-degree view of supply chain partners and how can this be achieved?
For retailers, having complete visibility of their supply chain partners is crucial, but it can be difficult to obtain - often due to the availability, timeliness, and quality of data. This can be addressed by technology, by the retailer and their suppliers working in more collaborative ways, and by better customer information.
Connectivity and system integration between the retailer and its suppliers can provide the critical information to ward off potential problems before they impact the customer. Clear and timely communication with retailers about any issues that suppliers are encountering as early as possible should be considered best practice as it will help retailers to adapt and plan better.
Part of this collaboration requires the supplier to understand what data they could facilitate to their retail customers and how they would actually use it, and likewise, what retailers can bring to the table to help their suppliers. This information exchange might not always be what either party wants to hear, but it’s essential to give them a complete view and understanding of the current situation and allow them to plan and adapt as necessary.
How are supply chain managers looking at demand spikes and scaling?
This is really a question about digital maturity. Those who have the right systems in place are far better positioned to react to spikes in demand and that’s something we’ve seen over the course of the pandemic. For traditional supply chain organizations that have manual processes and are using spreadsheets to manage the business, managing demand spikes is a challenge and these businesses have found it much harder to scale.
In this current climate, demand spikes are shining a spotlight on where these companies’ weaknesses lie and often highlight a lack of flexibility and scalability. This is where modern technology is really raising the bar for organizations. For instance, cloud-based data management technologies have a huge part to play as they can be leveraged to increase flexibility and scalability and can absorb some of the pressures that are brought on by spikes in demand. With an ERP system often at the center of a supply chain organization’s infrastructure, supply chain managers should look at non-disruptive technologies and services they can implement around it and how they will provide improved visibility, flexibility, and scalability while still leveraging their previous technology investments.
Another avenue is to bring in partners whose bread and butter is technology and who are therefore best placed to support supply chain organizations as they look to improve visibility and flexibility, and scale operations. This option will then allow supply chain managers to focus on doing what they do best – facilitating and fulfilling demand. Supply chain organizations could also consider bringing in more talent to create custom solutions in-house or to advise on the best solutions to implement to streamline their operations. This requires them to develop agile teams to affect change internally, without the need for large development teams.
As supply chain organizations continue to adapt to the “new normal” and plan for what may lie ahead, digital transformation will be key to helping them cope with changes in demand and ensure they are better positioned to adapt and scale.
To learn more, listen to this webinar on Retail Systems, Smart Data Management In The Age of Supply Chain Disruption.
About the Expert
Gareth Bennett, Head of Product Strategy, OmPrompt
Gareth began his career working in customer services, with a mandate to improve performance levels and boost retention. It’s here he learnt the value of ‘getting it right the first time’, as he developed new ways to reduce fulfillment errors and increase overall client satisfaction with proactive methodology and continual performance analysis, often without the help of the technology we see common today.
Taking his experience and a natural desire to understand and solution business challenges, Gareth joined OmPrompt where he’s designed and supported new client solutions as an integral part of the go-to-market team. Gareth is responsible for analyzing market needs and new technical innovations, and combining them to create solutions which deliver real world value for our clients.