From inventory shortages to supply difficulties, COVID-19 has disrupted every supply chain. Since the first lockdown in March 2020, the impact has been clear to see: some companies have been forced to slow down activity, if not stop completely. Others, on the other hand, have had to accelerate production.
COVID-19, revealing the weaknesses in supply chains
According to a study published in January 2021 by Orange Business Services, almost 40% of companies claim that they were not sufficiently prepared to cope with the pandemic. This crisis has highlighted the fragility of supply chain processes around the world.
In some sectors, production has increased while in others it has fallen. For example, food and basic necessities have seen a dramatic increase in demand. It is not hard to forget the shortages of pasta or toilet paper that we saw in supermarkets just a few months ago. But conversely, sectors like the automotive or aerospace industries have slowed down considerably, with factories restricted to working at half speed.
In such an unprecedented situation, finding the right stock levels is more complex than ever. This is not just due to a lack of visibility of consumer demand but also within the supply chain itself. Furthermore, the interdependence between different companies makes supply more fragile, slowing down production chains and delaying product availability.
How should we react?
Although consumption spikes have destabilized production and delivery patterns, companies can still align themselves with consumer behavior by following trends and looking for signs they can perceive from the market, especially in the post-lockdown period.
This strategy is essentially based on active market intelligence, but it does not help companies deal with demand uncertainty in the longer term in an effective way.
Improving supply chain resilience
The exceptional situation we are experiencing has raised awareness of the risks and the importance of reviewing processes. Companies see this as an opportunity to improve their processes and gain control of their supply chain.
Having visibility of the future is essential to allow them to plan their stocks as accurately as possible. In the food industry, this is important to avoid losses on products that are more perishable than in other industries. In sectors that are experiencing an economic slowdown, it is essential to avoid additional costs relating to inventory and overproduction.
However, anticipating an uncertain and changing future with precision is not easy, and doing so with traditional tools is even harder. The major challenge is to prepare to overcome the present crisis but also be stronger in the face of future global turbulence. Simple and quickly actionable solutions exist to anticipate disruption and efficiently plan inventories. We will share tips and best practices on this topic during our next webinar on Tuesday March 30th at 10:30 am.
Interested? There are still places available to register here: Access to the webinar
We will be happy to meet you there and answer your questions.