We have successfully finished 2020, a year that will forever be remembered for the pandemic that upended our lives and for the supply chains that kept those lives as close to normal as possible. But what have we actually learned about those supply chains during a year of such severe testing?
For one, no one had all the answers for avoiding the disruptions caused by the pandemic. There is little experience to draw on. We are used to dealing with localized events—a tornado here, political unrest there—and flexing our supply chains to circumvent those hot spots. But what do you do when the world is one huge hot spot? A lot of supply chains responded by trial and error. When something worked for one area, we duplicated it. If it didn’t work, we tried something else—sometimes with mixed results. We are all still trying to figure it out.
We have learned that retail will never be the same again. Consumers have now experienced first-hand the convenience of shopping from home, especially for those items that don’t require a lot of product research. Many, if not most, will continue their online buying post-pandemic, further accelerating the ongoing shift from brick-and-mortar sales to digital purchases. With the growth of e-commerce, we learned of the importance of efficient last-mile delivery and the need to continue to invest in technologies to make what has long been themost challenging part of the delivery process more cost-effective.
From an operations standpoint, we learned that our distribution facilities were not designed for social distancing. It only made sense for the original designers to group products and the people who picked them tightly together to save on storage space and travel distance. COVID-19 has changed that equation, leaving facility planners to wonder if the threat of future pandemics will make social distancing a standard design consideration going forward.
We also learned that our supply chains are too long and the time allotted for delivery too short, as customers didn’t ease up on their demand for speed even during a pandemic.
We learned that past demand is not really the most reliable way of determining future demand. Forecasts based on historical data become irrelevant when outside events change the dynamics so abruptly.
For one, no one had all the answers for avoiding the disruptions caused by the pandemic. There is little experience to draw on. We are used to dealing with localized events—a tornado here, political unrest there—and flexing our supply chains to circumvent those hot spots. But what do you do when the world is one huge hot spot? A lot of supply chains responded by trial and error. When something worked for one area, we duplicated it. If it didn’t work, we tried something else—sometimes with mixed results. We are all still trying to figure it out.
We have learned that retail will never be the same again. Consumers have now experienced first-hand the convenience of shopping from home, especially for those items that don’t require a lot of product research. Many, if not most, will continue their online buying post-pandemic, further accelerating the ongoing shift from brick-and-mortar sales to digital purchases. With the growth of e-commerce, we learned of the importance of efficient last-mile delivery and the need to continue to invest in technologies to make what has long been themost challenging part of the delivery process more cost-effective.
From an operations standpoint, we learned that our distribution facilities were not designed for social distancing. It only made sense for the original designers to group products and the people who picked them tightly together to save on storage space and travel distance. COVID-19 has changed that equation, leaving facility planners to wonder if the threat of future pandemics will make social distancing a standard design consideration going forward.
We also learned that our supply chains are too long and the time allotted for delivery too short, as customers didn’t ease up on their demand for speed even during a pandemic.
We learned that past demand is not really the most reliable way of determining future demand. Forecasts based on historical data become irrelevant when outside events change the dynamics so abruptly.
