Supply chain operation has undoubtedly been uprooted due to COVID-19, forcing many companies to rethink and transform their global supply chain model. Here are just a few of the changes that supply chains have navigated over the last few weeks and will continue to navigate in the foreseeable:
- Quarantined populations cannot work in offices to support supply lines
- Countries housing suppliers of international retailers and manufacturers have closed their borders
- Operators lack visibility across the extended supply network to see their risks
With states advise individuals to self quarantine and social distance, supply chains have had to lean on digitalization and advanced technology to forecast, track, and deliver high demand, essential products to businesses and the public. In fact, a recent study found the world’s largest companies or their suppliers own more than 12,000 facilities (factories, warehouses, and other operations) in COVID-19 quarantines areas. Inventory visibility has become crucial in supply chain operations including the dependency on AI to manage large amounts of data that changes by the minute. Here are a few ways inventory visibility is vital in guiding the new supply chain:
Improved Extended Supply Network Forecasting
Supply chain leaders are working around the clock to ensure they accurately forecast for present and future product demand. This will ensure stores are stocked in the midst of bulk buying and e-commerce dependencies. According to Rakuten, for March 12 through March 15, ecommerce grocery sales grew 35.3% and orders were up 33.4% compared with last year. This illustrated the challenges many supply chains are experience as they strive to meet product demand.
Companies that embrace new digital approaches will be able to illuminate the supplier network, gaining visibility to critical supplies as quickly as possible. For those companies with complex supplier networks that lack the systems and tools to provide extended supply chain visibility, traditional approaches are likely to take too long and be insufficient to alleviate risk and vulnerabilities.
Breaks Down Silos to Empower Decision Making
Traditional, linear views of supply chains are quickly transforming into digital supply networks (DSNs) where functional silos are broken down and individuals at all roles are connected to the full supply network to enable end-to- end visibility, agility, responsiveness and collaboration. For many companies that don’t have full electronic connectivity to suppliers to coordinate the inbound flow of products and materials, moving quickly to get access to data and build management dashboards to support visibility and decision making will be a priority to ensure resilience now and in the future.
Supply chain experts using artificial intelligence and advanced analytics to do the heavy lifting in the search of insights into inventory scheduling, empowers the supply chain to see trends and capture insights from deep within their vast inventory databases with little to no training. Proactive insights show when stocks are running too low or going too fast while deliveries are accurately tracked to keep supply chain teams up to date and informed on the metrics that matter that most.
Reduces Costs Across the Supply Chain
Research shows that by reducing stock-outs and overstocks, inventory costs can be lowered by as much as 10 percent. To begin optimizing an end-to-end supply chain, companies should understand their supply chains more deeply and in more dimensions. Inventory visibility means getting to know about the inventory available-units, variations, stock levels and possibility of going stockless. Having proper knowledge of key items will reduce the costs drastically.
When supply chains rely on artificial intelligence and analytics systems, logistics lines can flow smoother, saving on inventory costs and valuable resources. These savings stem from proactive inventory insights that alert risks and anomalies including instances when too much inventory of unsold goods is being held, taking up valuable space that could be used on higher demand sku’s.
While supply chain leaders react to the evolving impact of COVID-19, there is no single solution to navigate the shock value of this global crisis, but rather supply chains are being called to consider an operational shift towards a more real-time, data-driven and predictive model. Ultimately, as a result of greater intelligence, accuracy, agility and visibility, supply chains will establish longer-lasting reconfigurations to build long-term resilience.