It’s an understatement to say that the COVID-19 pandemic has radically altered how we do business. Around the world, consumer purchasing habits and business operational methods have shifted in order to prioritize safety and essential goods, and the global supply chain industry has adjusted to support these needs.
Pandemics and epidemics aren’t a new phenomenon. In the last few decades, outbreaks of SARS, H1N1, Zika, and Ebola have caused major disruptions to everyday life around the globe. Now, many inventory management and supply chain management teams are realizing that they aren’t properly equipped with the right resources and infrastructure to respond to a global pandemic in a meaningful way. In order to make sure people have access to the essential goods they need to get through a crisis, businesses and governments are rethinking their supply chain operations in order to make them more robust and resilient, while minimizing the risks to their workers, citizens and customers.
Recently, our Europe and North America CEOs weighed in on the supply chain and logistics impacts of coronavirus. In this segment of our series, we’ll touch on how global supply chains of multinational enterprises in Latin America, Africa, and Asia are responding to the challenges of COVID-19.
Global Effects of the Pandemic
Around the world, responses to the pandemic have varied. Brazil, for instance, imposed a two-week, country-wide shutdown on all nonessential services in order to stem the spread of COVID-19. [1] The economy screeched to halt, leading the government to ease some restrictions and reopen manufacturing with some restrictions of number of employees with a production facility. As quarantine rules relax, some stores have reopened with reduced hours, [2] though the country has been identified as a potential new hotspot for the virus. [3]
South Africa is one of the hardest-hit countries in the African continent, and has enacted a hard shutdown almost as aggressive as China’s, allowing citizens to leave their homes only to purchase groceries. The police and army have even been brought in to restrict movement across the country. [4] Australia also imposed a hard shutdown, except for essential services. [5] In Asia, the response has generally been to impose hard shutdowns, as well.
However, the varying responses and shutdowns have led to different countries being in different states of readiness to resume normal operations. China, for instance, shut down early, while parts of Southeast Asia remained open. By the time China was starting to ease restrictions, the countries of Southeast Asia had gone into a hard shutdown. The result has become something of a standstill — another vulnerability of the interconnected global supply chain that’s been exposed by the pandemic.
The Pandemic’s Lasting Changes on Supply Chain Management and Technology
While businesses have altered operations in order to meet the needs of consumers in the short-term, there are some changes that we think will remain in place, even following the pandemic recovery.
Going paperless is likely to become a priority. As forms and documents are transferred back and forth between offices and warehouses, multiple people come into contact with the documents on each trip. Because paper-based operations create safety concerns, the first response was to print multiple copies of forms to limit the points of contact. For instance, if a document needed to pass through six people, six copies would be printed. However, printing at six times the usual volume quickly becomes costly and inefficient. Going paperless presents an efficient alternative that minimizes the vectors that could expose employees to the virus.
Further, countries and companies may consider higher levels of stockpiling resources in order to be self-sufficient in the event of another crisis. Even regional markets are often dependent on global trade, which has raised the concern as to whether certain essential goods may need to be insourced within individual countries, rather than outsourced from abroad. This became especially evident when shutdowns in China led to global shortages of personal protective equipment. [6]
On the supply chain management side, this could easily extend to voice picking technology headsets, which have become another point of concern. At the bare minimum, the foam earpiece and microphone protectors need to be replaced and the headset disinfected between uses, but for warehouse management teams, this raises the question of whether to invest in additional equipment for both base staff to have their own equipment (headsets) and temporary workers.
The supply chain industry relies heavily on temporary agencies to hire workers when demand peaks. However, considering that the number of people working more than one job has increased in recent years, there’s a greater risk of exposure to the virus among seasonal warehouse workers. Instead of accepting these risks, supply chain managers may decide to incorporate more autonomous mobile robots (AMRs) into daily operations. AMRs can work longer hours and, because they remain isolated in warehouses, don’t run the same risk of exposure as human workers do.
Finding the Good News: 3PL Solutions and More
It’s not all bad news, though. There are several short-term solutions that have the potential to provide significant benefits during this challenging time.
One is the rise of remote work. While more common and accepted in the U.S. and Canada, the practice is frowned upon in many parts of the world, where workers are expected to come to the office no matter what (except during a pandemic). Employers in these regions are discovering that telecommuting can work. They’re also learning that remote work and video meetings have the potential to cut down on office space costs, utilities, travel costs, as well as time required for meetings, conferences, and client visits. This also creates numerous opportunities to increase access to certain jobs and positions for remote workers while maintaining worker safety, even after pandemic recovery efforts have ended.
Another area where we expect to see lasting change is with third party logistics (3PL) providers. 3PL solutions have generally been faring well during the current pandemic, especially those serving clients in the eCommerce, food industry and cold chain. Once the pandemic subsides and the stay-at-home orders are lifted, consumers will inevitably rush back to restaurants, but we predict that there’ll be a sustained interest in home-cooking for some time, buoyed by the popularity of video applications like Zoom.
The Resilient Supply Chain Solution
The pandemic has shown that it’s more important than ever to have a robust and flexible supply chain in place to support the needs of consumers — both in everyday life and in crisis situations.
Körber’s initiatives are designed to help businesses find the solutions to their supply chain problems. We have the largest array of warehouse design, automation, and consulting solutions of any global company. We offer software for different facets of the supply chain for both global conglomerates and small-to-medium regional organizations, as well as robotics — including palletizing and layer picking solutions. Using our vast array of technology and knowhow, we can help deliver the best solutions for our customers’ needs.
