The pandemic has taken its toll on most industries around the world. However, none are as prevalent and evident as the hurdles faced by the logistics industry – particularly in the flow of the supply chain. Global supply chain leaders continue to face the aftermath of reduced labor, operations, and business overall. Not only that, but they must also deal with the repercussions of other members in the chain being hindered in the same way.
This domino effect has motivated individual members of the supply chain to adapt to the new climate quickly. Business leaders on all fronts are attempting to reshape and repurpose their endeavors to help minimize the potential damage.
But even though this apparent darkness, there is still room for light. The current disruptions to the supply chain have opened much space for creative solutions which aim to mitigate damage. But to better appreciate the effort of these solutions, we must first correctly understand the impact of the obstacles.
Current Challenges Faced by Supply Chains
Recent reports by Fortune state that nearly 94% of the Fortune 1000 companies are facing supply chain disruptions due to the current climate. Given this fact, it is safe to assume that smaller companies would be faring far worse. The fundamental challenges within the supply chain arise from basic flaws such as changes in consumer behavior, increase in demand, lack of operational efficiency, etc.
But to delve deeper into these hurdles, let us look at some specific issues:
Due to port congestion, container shortages, and the pandemic generally, freight volume has drastically reduced in both local and international trade. Moreover, the demand for ocean-shipped cargo is plummeting. The consequence of this is a decrease in carrier sailing, cancellation of shipments, and reduction in overall carrier capacity.
Consumers around the globe have entirely shifted to online modes of trade. E-commerce has become the norm, and companies that are well-versed in IoT are beginning to reap the rewards. However, this poses a significant logistical problem since storage, conversion, and distribution of cargo runs on a schedule that cannot be hastened simply by expectation. Even worse is the operational limitation posed by lack of labor, transport facilities, permissions, etc.
Both the import of raw materials and export of manufactured goods has been limited. This poses a severe threat to both transportation and communication processes between businesses. Trading routes are slowly shutting down, partnerships are becoming less beneficial, and even acquisition is affected by these new restrictions.
Minimizing the Damage
The crisis that businesses are faced with today has warranted the use of any means to continue smooth business operations. Leaders are making rapid decisions to generate immediate responses while future planning remains at the back-burner.
Let us look at some ways in which businesses are tackling disruptions in order to minimize the compounding damage:
Generating proactive awareness
A long-term view of possible disruptions in the supply chain has become the prime focus for many companies. Industry leaders are carefully analyzing vulnerable sectors and trying to raise awareness within them. For instance, warehouses are advised to be store closer to their delivery destination; storage facilities are advised to convert to retail, and so on. This aims to ensure minimal backlash during unforeseen circumstances.
Developing emergency strategies
Backup plans are always an excellent way to handle things when they go array. Companies have moved on devising strategies to ensure cost-efficiency and resource management in their own sectors during times of crisis. They have also begun using IoT to their advantage in the form of robotics, automation, AI, and more to reduce personnel risks.
Prevention of disruptions
When both awareness and expectation have been achieved, the only thing remaining is to prepare for the worst. Companies now have dedicated teams looking into possible malfunctions in operations to predict disruptions. Once identified, they can be efficiently removed or strengthened as required.
The pandemic has undoubtedly tested the resilience, determination, and adaptability of supply chain leaders worldwide. In light of the current situation, many leaders have come forth with creative responses to these obstructions while others focus on doubling down current operations. In either case, the industry as a whole continues to work towards a single goal – reclaiming lost time and resources in hopes of bouncing back into the game twice as strong.