COVID-19 has brought many disruptions to business processes and the national and global supply chains. In a March 2020 survey by the Institute for Supply Management, 75% of surveyed companies reported pandemic-related supply chain disruptions. More recently, more than 60% of supply chain and logistics companies have experienced either some or a significant detrimental effect to their supply, demand and logistics operations.
Though this scenario can be tricky to navigate, it presents many opportunities for businesses to streamline, focus and expand their critical services to meet pandemic challenges and demands. The guide below will discuss how COVID-19 impacts the supply chain and how to manage the hurdles and logistics opportunities from COVID-19.
Challenges in the Supply Chain Because of COVID-19
Like several other industries, supply chains have experienced magnified challenges during the pandemic because they are front and center in the public eye, with shortages sometimes making the front-page news. Below are some of the primary logistics challenges from COVID-19.
1. Global Traffic Restrictions
One of the most notable shifts in the supply chain from COVID-19 involves temporary restrictions on global traffic. Global travel bans and import and export restrictions caused challenges in importing and exporting goods internationally. Even where the supply of available products remains robust, many suppliers have had difficulty moving their stock because of border closures and lengthy customs delays. A recent Nature study found that supply chain losses are more dramatic with longer, looser restrictions than shorter, stricter ones and worsen as the number of countries involved increases.
2. Supply Decreases
Another of COVID-19’s significant impacts on logistics involves limited available supply. The market has been experiencing a decrease in the supply coming from severely impacted countries. Declines that come in brief, sudden bursts are called supply shocks. At the beginning of the pandemic, these supply shocks mainly affected goods sourced from China or made from China-produced components.
When supply decreases hit, companies must quickly determine what other sources of products and parts they can access. Some trust in supply chain resilience and hold firm in their existing practices, hoping the shock will be temporary. Others scale back production dramatically or search for alternative suppliers.
3. Demand for Essential Products
As case numbers rise and people stay close to home, demand for some essential goods has increased dramatically. The United States experienced this phenomenon in the pandemic’s early days. Infamously, toilet paper and other staple products like bread, pasta, rice, flour, hand soap and other cleaning supplies began to disappear from grocery store shelves. Other critical products like ventilator components also became valuable, hard-to-source commodities.
The issue here was inaccurate forecasting, rather than production capabilities. Demand for these staple products generally remains relatively steady, so manufacturers and suppliers can pinpoint how much product they need to send out. Once suppliers realized how dramatically demand had spiked, they could ramp up their production capabilities to match. A few months later, store shelves had largely become fully stocked again. However, numerous essential items — including hand sanitizer, antibacterial wipes and over-the-counter cold and flu medicines — remained in high demand. Many manufacturers now carry up to 10% more inventory than their target levels, so they can respond surefootedly to demand spikes.
How the Supply Chain Industry Is Adjusting to COVID-19
Overall, many industries have seen a marked change in logistics from COVID-19. Below are a few ways the supply chain industry has adjusted to meet the new pandemic reality.
1. Prioritizing Automation
Because asking employees to work in a confined space is dangerous, automation has become a significant priority for many businesses. Supply chains had already been moving toward increased automation because of the high efficiency it provides. Its additional health benefits and the streamlining required due to consumer demand for high-volume, low-cost shipping will likely push the supply chain industry further in this direction. The move toward automation will likely benefit many industries by freeing employees from routine tasks and enabling them to exercise their creativity and problem-solving on more complex work.
2. Pausing Aspects of Globalization
In response to COVID-19, the trend toward increased globalization will likely diminish, at least temporarily. In the 21st century, many industries have found international trade to be one of the best methods of sourcing products and components. However, in the relative isolation the pandemic has imposed, global interactions have slowed down. More companies have shifted to sourcing and producing local goods. This strategy allows them to avoid customs barriers or delays and maintain a safe environment for employees while providing more local business partnership opportunities.
3. Responding to the High Demand for Faster Delivery Options
As consumers shun brick-and-mortar businesses in favor of web purchases, they increasingly want online shopping to offer the convenience of in-store shopping. Retailers will need to provide faster delivery options to satisfy consumer demand for quick receipt of their items.
Many companies are looking into new partnerships with third-party freight and courier delivery services to boost customer satisfaction and retention, often seeking appealing options like these:
This scenario presents a tremendous opportunity for business organizations to strengthen their third-party connections. It also allows delivery operations to showcase their dependability, flourish and grow.
4. Increasing Transparency
The pandemic has led to increased transparency among all parties. The need to ensure employee and consumer safety has led to a push for improved supply chain visibility, for instance. Distribution centers are requiring more detailed information on what risk management practices suppliers have implemented. Consumers also want specific reassurances that the delivery personnel coming to their homes have taken the recommended strategies to keep themselves and their client contacts safe.
Businesses at every point in the supply chain have an opportunity to boost their reputations for adaptability and trustworthiness by providing this much-needed peace of mind. Taking steps like these is helpful:
• Posting health and safety protocols on their websites
• Being transparent and consistent in prohibiting symptomatic employees from working
• Responding honestly to customer inquiries about product sourcing and safety practices
Contact ExpressIt for Reliable Delivery Services During the COVID-19 Pandemic
So far, we’ve discussed how the COVID-19 pandemic has impeded international traffic, decreased supplies and increased the demand for many essential items. We’ve also explored how the global marketplace has turned toward automation, moved away from globalization and seen a greater need for faster delivery and improved transparency.
Now, it’s time for your business to tackle the challenge of changing and optimizing for pandemic success. To ensure reliable deliveries for your business and minimize COVID-19’s impact on your logistics, turn to ExpressIt for supply chain solutions.
Our woman-owned, WBENC-certified business offers warehousing and expedited delivery solutions across a range of industries. Whether you need routed delivery, courier delivery, same-day delivery, last-mile delivery or a custom option, we are happy to work with you to meet your individual business transportation needs.
We also take pride in our responsive customer service. Our friendly, forward-thinking professionals are happy to consult with you about the best delivery strategies for your business and help you solve the challenges you face, pandemic-related or otherwise.
Contact us today to schedule a delivery or request a quote.