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Supply Chains and the New Normal

March 24, 2022


I confess I hesitated to use the term “new normal” in the headline of this article. In a previous post, I noted that “new normal” has been identified a buzzword (or buzz phrase) that annoys many people.[1] For example, John Ferguson, a Research Associate at TrustRadius, writes, “Close your eyes and imagine the most common phrase you heard in 2020. The odds are good that ‘new normal’ would top that list! It [became] the number one most annoying business buzzword of 2021.”[2] When people, including me, talk about a “new normal,” they are trying to imagine what the business landscape will look like in a post-pandemic world. I daresay most pundits believe the new business landscape will be considerably different than the pre-pandemic business landscape.


Benjamin Dreyer (@BCDreyer), Random House’s executive managing editor, writes, “It’s pointless to yearn for a post-pandemic return to normalcy. Or is it normality?”[3] Apparently, normality is preferable to normalcy in etymological circles. Dreyer, however, argues we shouldn’t bicker over words in common usage. He concludes, “It’s pointless to bicker over ‘normalcy’ vs. ‘normality’ — especially when talking about life before the pandemic.” My point is that we are not going to return to life as it was before the pandemic. Occasionally, the world experiences — to use another buzz phrase — a paradigm shift. The shift creates new circumstances and the only way you can refer to those new circumstances is as the new normal. “If you’re looking for a sudden return to a normal, pre-pandemic operating environment,” writes Matt Gunn (@mattgunn), Vice President for solutions marketing at Slync.io, “keep waiting.”[4]


What Might the New Normal Look Like?


As Yoda, the Jedi Master, once stated, “Difficult to see. Always in motion is the future.” Difficult as it may be, supply chain professionals need to plan for the future. In order to do that, they need to have some idea of what lies ahead. To achieve that end, Gunn insists real-time data is more important than historical data. He explains, “The name of the game is future-forward thinking and leveraging real-time data to be able to quickly adapt to ever-changing conditions. Right now, the industry cannot rely on historical data, so the value of real-time data and analytics has never been more important to help companies pivot and adapt.” I agree with that assessment. Which is why, at the peak of the pandemic, Enterra Solutions® developed the Enterra Global Insights and Decision Superiority System™. In addition to real-time data analysis, there are a few other trends that provide clues to what the new normal might look like.


Mark Lau, Chief Commercial Officer at TVS Supply Chain Solutions, believes the new normal is more about spotlighting old vulnerabilities than it is about new circumstances. He explains, “While the ‘New Normal’ in supply chain implies a fundamental shift to the core of the industry, the pandemic-driven changes to behaviors are neither ‘new’ nor are they so developed as to be called ‘normal’. A more accurate summation would be to view COVID-19 as having accelerated the pre-existing vulnerabilities in the global supply chain and stirring to life the lethargic industry-wide shifts already underway. However, ‘New Normal’ is an effective shorthand, and it’s the term we’ll use here.”[5] He predicts the new normal will involve a greater stress on supply chain resilience, addressing changing customer demand and expectations, and, transforming traditional supply chains into digital supply chains.


Richard Wilding (@SupplyChainProf), a professor of supply chain strategy at Cranfield School of Management, has his own views about what the future may hold and the dangers to companies that fail to adapt to changing conditions. He writes, “If a business’s supply chains have remained the same as they were before the pandemic, then it is going to have problems.” One thing that won’t change, Wilding insists, is that world will remain volatile, uncertain, complex, and ambiguous. That’s why Lau insists supply chains must become more resilient. “Resilient supply chains,” he explains, “were able to cope and recover from sudden shocks and disruptions during the pandemic.”


Probably the greatest unknown factor that will affect supply chain operations is consumer behavior. Wilding notes, “Supply chain disruptions and shortages are continuing to happen because of the dramatic upturn in economies, a release of bottled-up consumer spending.” However, rising inflation rates will inevitably dampen consumer spending. One consumer trend that won’t change is the increased use of the digital path to purchase. Lau explains, “Having evolved at a speed that McKinsey describes as ‘decades in days’, it is expected that most if not all the boom experienced in eCommerce are here to stay. The wide adoption of digital sales channels also means greater demand for e-fulfilment and delivery options.”


Another trend that will impact supply chain operations is near-shoring. I have argued for years that globalization is moving towards regionalization as global wages rise and transportation costs increase. The staff at American Global Logistics writes, “Supply chains are transitioning from global sourcing to regional sourcing. … Supply chains will have to adapt. The shift to regionalization will likely continue in the foreseeable future.”[6] The Russia/Ukraine conflict will hasten this trend. Wilding adds, “Businesses have seen the need for shorter, more localized supply chains. Supplies of some high-demand raw materials, like cobalt and lithium, can only come from specific regions — nothing can change that situation — but there can be more near-shoring and on-shoring.”


The one trend most pundits agree on is the digital supply chain movement. Wilding notes, “The crisis has demonstrated the need for transparency: continuous monitoring and intelligence, real-time information across networks in order to anticipate and understand the impact of volatility and better deal with the complexity involved.” Lau adds, “Before the pandemic, the industry had been grappling with digital disruptors and the adoption of technology. Almost overnight, conversations within supply chain businesses about having both customer interactions and internal operations going digital went from ‘in the pipeline’ to ‘we needed it, yesterday’ as governments placed movement restrictions. Logistics service providers quickly utilized the technological platforms at their disposal to uphold business continuity, and those who had entered 2020 with more mature digitalization of their internal processes found themselves, literally, back online quicker.”


Concluding Thoughts


As you ponder the future and how to adapt to it, remember to take a holistic view of your organization. People, processes, and technologies must all adapt to new realities. Concerning people, Gunn notes, “The pandemic was a huge wakeup call for the supply chain and logistics industry on all fronts, but keeping employees happy is key to a successful workforce. Workers will be demanding higher wages in order to return to work, so automating the redundant … is paramount to cater to this new world of work post-pandemic and making people’s jobs more productive and efficient. Automating the mundane work will keep employees happy, support the gig worker and help to dial up operations when you need it and scale back when you don’t.” On the process front, Lau concludes, “The future of supply chains is Digital and Autonomous. While, yes, the definitive timeframe of such a ‘future’ is as elusive as a concrete definition of ‘New Normal’, the trend would appear to show that those who can, do better in the longer run. Automation at scale increases efficiency and ranks as a top critical factor for digitizing business processes.”


For his part, Wilding concludes, “A new better for supply chains will bring some major changes for wider societies. There will be benefits from more automation, digital systems and on-shoring, including higher quality jobs, the potential for more diversity in the workforce, a reduced transport footprint for the environment and less plastic waste. But at the same time, there will be challenges, including the need for new business models to ensure viability and maintaining the engagement and motivation of supply chain workers. The biggest barrier, though, will be complacency around the ‘return to normal’.” I would argue there will be no “return to normal,” if, by that phrase, Wilding means a return to pre-pandemic conditions. I don’t think, however, that is what he means. I think he means a return conditions other than constant crisis — normality, if you will. Digital transformation can help create more normal operating conditions. Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, explains, “‘Digital transformation’ at its best [is] a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[7] I believe that new system, new cadence, and new mindset is what Wilding refers to when he talks about the return to normal.


[1] Stephen DeAngelis, “Beefs About Buzzwords,” Enterra Insights, 16 February 2022.
[2] John Ferguson, “The 27 Most Annoying Business Buzzwords of 2021,” TrustRadius Buyer Blog, 27 April 2021.
[3] Benjamin Dreyer, “It’s pointless to yearn for a post-pandemic return to normalcy. Or is it normality?” The Washington Post, 3 February 2022.
[4] Matt Gunn, “New Normal Presents New Way of Doing Things for Supply Chain Leaders,” Supply & Demand Chain Executive, 5 February 2022.
[5] Mark Lau, “Is Your Supply Chain Future-Ready for the New Normal?” LogiSYM, 22 December 2021.
[6] Staff, “10 Emerging Supply Chain Shifts: Are You Prepared?” American Global Logistics, 20 May 2020.
[7] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.

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