Has COVID-19 continued to affect supply chains?

In March 2020, the UK, like the rest of the world, came to a halt with the COVID-19 pandemic. Lockdowns, stay-at-home orders and travel restrictions caused disruption for both consumers and businesses. Supply chains were affected globally whilst also remaining a key response to the pandemic by transporting much-needed fuel, food, and medicines to those who needed them the most.

Even at the end of 2022, the effects of COVID-19 were still being felt in supply chains through issues with sourcing, inflated production & shipping costs, as well as labour shortages. Overcoming these challenges has not been easy and has requires businesses to work together to create a resilient supply chain.

What issues did COVID-19 highlight in supply chains?

For many businesses, COVID-19 emphasised the need for robust supply chain risk management processes to be developed and implemented. Risk management identifies internal and external supply chain risks and how to best fix any issues to minimise disruption. These processes should cover all elements of the supply chain such as planning, sourcing and logistics, and can include risks such as resource shortages and delivery failures.

Although many within the supply chain had risk management processes in place, COVID-19 underlined the need for more thorough documents to be produced and for any blind spots (such as on global medical pandemics) to be cleared up and information added.

Having good relationships with supply chain partners is key but because of the COVID-19 pandemic, the reliance on one main partner showed to be an issue for businesses. For example, if a UK business relied on a company in China for all its packaging but the pandemic stopped all shipments, the UK business has no packaging. As a result, many businesses have identified the need to diversify their supply chain partnerships and build a much larger group of partners.

Lean inventories also caused issues for businesses during the pandemic. For companies that don’t hold large amounts of stock (either by choice or necessity), suddenly not being able to order or receive replacement stock became a problem. Although this practice normally frees up cash flow, the delays in delivery, increased costs of products and lack of supply caused issues for many businesses through the supply chain.

Do supply chains need to change?

Following recent disruptions, supply chains need to change. Although the pandemic and its impact couldn’t have been predicted, it doesn’t mean changes can’t be made to ensure disruption like it isn’t felt again.

Continuity

Before the pandemic, many businesses were focused on the need for cost reduction within the supply chain. Whilst this is still important, COVID-19 showed the importance of delivering a continuous supply to customers, even if it’s not necessarily the cheapest solution. By having an uninterrupted flow of goods, customers are much more satisfied and likely to return, even if this is a slower process compared to pre-pandemic standards. This means that companies should look at alternative suppliers or delivery companies, rather than relying on one.

Collaboration

The relationship between suppliers and buyers needs to change following the pandemic. There needs to be a closer alliance between all supply chain parties through collaboration and data sharing to ensure minimal impact in the event of another large-scale disruption. This could be through blockchain technology which enables all parties to access secure data and exchange information without fear of an information leak.

Visibility

Having better collaboration with everyone in the supply chain is important, as is having clear visibility on all aspects of your supply chain operations. Using technology such as sensors and IoT devices can provide valuable information and data on where your products are in the supply chain and if they are in the correct conditions. For example, in cold storage transportation environments, ensuring all products stay within set temperatures is key, and sensors can enable you to do this.

Agility

Reliance on one business practice is now not a sustainable way to be successful. Instead, businesses need to be able to change and adapt their ways of working to meet changes in the market, and demand. Whether this is working with a customer to be agile in their needs, or moving away from lean inventories and holding more stock, working to adapt to the market and customer requirements is key to ensuring long-term success.

Find out more

No matter how supply chains continue to develop in the post-pandemic era, it’s clear that the industry will continue to develop and grow in both technological uses and scenario planning to avoid disruptions in the future. To find out more about TouchStar’s delivery optimisation solutions and how they can help your business, please get in touch today.