Experts tell us the virus causing COVID-19 is probably here to stay — along with all the variants of the virus. Shelly Xuelai Fan (@ShellyFan), a neuroscientist-turned-science writer, explains, “Coronavirus is almost synonymous with Covid-19, social distancing, and frustration. But it’s not one virus — it’s a whole family. The good news is that we’re already well acquainted with some members of the family. One estimate suggests these buggers have been around for 10,000 years, and we’re aware of dozens of strains, with seven that can infect humans.”[1] The point here is that there is likely to be a significant transition period between the pandemic and normalcy. Robert J. Bowman, managing editor of SupplyChainBrain, asks, “Emerging from the pandemic, where do we go from here?”[2] It’s a question with which supply chain professionals have been wrestling for months. Bowman seems to think supply chain professionals should have been better prepared. He notes COVID-19 “left no country, company or individual unaffected”; however, he writes, “How ‘unexpected’ it actually was is up for debate — many have adopted the term ‘black swan,’ Nassim Nicholas Taleb’s coinage for a highly improbable but game-changing event, to describe the pandemic. But Taleb himself insists that it was really a ‘white swan’ — something that was entirely predictable, if not inevitable.” Ready or not, Bowman’s question applies: “Where do we go from here?”

The value of supply chain management

According to business writer Laura V. Garcia (@LauraVGarciaSCM), “Turning crisis management into an opportunity not only helps supply chains today, but will pay dividends in organizations’ future value chain.”[3] She adds, “Regardless of sector or size, supply chain management (SCM) is a vital part of every organization looking to maximize customer value and optimize profits. As sales plummet, and costs skyrocket, industries that previously sidelined procurement and SCM for bigger problems now turn to it in hopes of finding solutions and improved profits.” Sidelining the supply chain in flush times is a bad idea. For years, Lora Cecere (@lcecere), founder of Supply Chain Insights, has insisted, “The supply chain IS Business, not a department within a business.”[4] That’s why most supply chain professionals prefer thinking about value networks rather than supply chains.

The Council of Supply Chain Management Professionals (CSCMP) defines supply chain management this way: “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.”[5] Garcia adds, “SCM synergizes efforts that are otherwise often performed in silos, ensuring alignment of efforts across departments so you can realize objectives, and find the market and economic value that affords you competitive advantage.”

What lies ahead

To prepare for the future — the new normal — it helps to have some understanding of the challenges and opportunities that lie ahead. Steve Banker (@steve_scm), Vice President of Supply Chain Services at ARC Advisory Group, has identified some of the megatrends changing the supply chain landscape.[6] A landscape supply chain professionals must navigate successfully if their organizations are to thrive. Those trends are:

1. The Growth of Ecommerce. Journalist Fiona Briggs reports, “The Coronavirus pandemic has accelerated growth in online sales in 2020 by five years and permanently changed the shopping habits of two in five consumers, according to a new survey by NatWest and Retail Economics.”[7] Banker points out this trend has already increased warehouse automation, motivated some companies to create digital twins of their supply chains, and focused a lot more attention on last-mile solutions.

2. Relentless Competition. Banker writes, “It is a truism that competition is tougher, that digital technologies are creating new tough entrants to a variety of industries, and that industry changes are happening faster and faster. Supply chain applications have long been a way for companies to compete better. These applications improve service while holding down supply chain costs.”

3. Mass Personalization. According to Banker, “Manufacturing automation — including 3D printing (also called additive manufacturing) — is making it easier to create many, many more product variants. Companies are beginning to explore on-demand manufacturing rather than traditional manufacturing models, meaning they can keep less physical inventory on-hand. Using a digital representation of parts allows manufacturers to make small changes to digital files quickly at no additional charge, which provides more agility in the manufacturing process.” Banker points out mass personalization also increases supply chain complexity.

4. Urbanization. Urbanization is a historical trend that continues to flourish. Getting products to people in urban environments has increased street congestion and decreased air quality. Logistics providers are looking for solutions to both these challenges.

5. Mobile and Cloud Computing. Banker notes, “When it comes to supply chain applications, there has been a decided trend toward software-as-a-service products hosted in public clouds. Public cloud solutions have a quicker payback period and can be implemented more easily and quickly. Covid-19 has also proven that cloud-based solutions can be implemented with far fewer consultants located at the customer’s site.”

6. Robotics & Automation. As Banker pointed out earlier, warehouse automation continues to grow. He also sees a future involving autonomous vehicles (trucks) driving in restricted lanes across the country. He also notes implementation of robotic process automation is on the rise.

7. Sensors & the Internet of Things. Banker writes, “The theory is that as more and more devices throughout the supply chain and manufacturing process become part of the ‘Internet of Things,’ they will produce an incredibly rich data stream that will send signals in real-time to trigger a wide variety of events.” Fifth-generation (5G) telecommunications is touted as the technology that will bring the IoT to the next level; however, Banker notes, “Across the U.S., ARC is not hearing providers of supply chain technology leveraging this network to provide new value to their customers.”

8. Big Data, Artificial Intelligence & Machine Learning. Banker notes, “In the supply chain realm, machine learning is where most of the activity surrounding artificial intelligence has been focused.” He also stresses that cognitive technologies are being used to improve supply chain planning. Enterra Solutions® has had great success in this area leveraging the Enterra Cognitive Core™, a system that can Sense, Think, Act, and Learn®.

One trend Banker didn’t mention is blockchain, probably because its impact on the supply chain has yet to be proven. Nevertheless, many analysts believe it has great potential.

Concluding thoughts

Steven Bowen (@StevenJBowen1), Chairman and CEO of Maine Pointe, observes, “Post-Covid, CEOs face a tough re-adjustment period including analysis of new and possibly permanently changed consumer behavior patterns and expectations, and the need for a serious re-assessment of the most basic fundamentals of their entire supply chain and operations.”[8] As companies transition into the post-pandemic world, Bowen asserts, “Successful transformation begins with collaboration, innovation and good data.” Of course, good data is only useful if organizations have the cognitive technologies to mine it for value. Cognitive technologies can help organizations become more agile and resilient. Bowman insists agility is the key to success. He argues, “Success today depends less on knowing the future than on the ability to adjust to what actually happens. That’s the key to surviving — and thriving — in an unpredictable world.”

Footnotes
[1] Shelly Xuelai Fan, “Can We Wipe Out All Coronaviruses for Good? Here’s What a Group of 200 Scientists Think,” Singularity Hub, 27 October 2020.
[2] Robert J. Bowman, “Emerging From the Pandemic: Where Do We Go From Here?” SuppyChainBrain, 1 February 2021.
[3] Laura V. Garcia, “The Value of Supply Chain Management,” Supply Chain Digital, 4 February 2021.
[4] Lora Cecere, “Sage advice? Only for turkeys.” eft, 1 February 2013.
[5] Staff, “CSCMP Supply Chain Management Definitions and Glossary,” Supply Chain Management Professionals.
[6] Steve Banker, “Megatrends Reshaping Supply Chain Management,” Forbes, 1 February 2021.
[7] Fiona Biggs, “Five years of online sales growth in 12 months, permanently shifts shopping habits for two in five consumers, Nat West reports,” Retail Times, 12 February 2021.
[8] Steven Bowen, “Post-Pandemic Adjustment: Getting Your Supply Chain Right,” Chief Executive, 5 January 2021.