Managing the Supply Chain digitally during a crisis

Tips for Quick Wins

When experiencing exceptional situations, where supply chains are interrupted, the value of maximum supply chain transparency becomes apparent.

According to Gartner, who examined the immediate effects of the COVID-19 crisis on companies, by 2021 organizations with robust, scalable digital commerce will achieve 30 percent higher revenue growth than non-eCommerce organizations.

That is if they make better use of digital channels during the COVID-19 outbreak. Due to quarantine and border closures, the supply of primary products, goods and even labor was suddenly at risk without warning: according to a survey by the Institute for Supply Management (ISM), more than three-quarters of the companies reported supply chain impacts, for example on supplier capacity and inbound raw materials and parts, needed time to research alternative sources to balance out supply and demand.

Using the insights from their COVID-19 survey and their analysis of the Chinese market, who has recovered quickly after the initial crisis, Gartner analysts have listed specific recommendations on how supply chain leaders can use technical support to provide rapid crisis management.

Quick wins for small and medium-sized suppliers

Digital resources are more accessible to large suppliers than to small and medium-sized ones. In many cases, large companies are already connected to retailers via EDI (Electronic Data Interchange) and can report deviating delivery quantities immediately. In contrast, smaller suppliers, such as fruit and vegetable growers, often do not have the necessary resources, capacities and IT infrastructures.

This does not mean that these companies have to become digitally dependent. Gartner recommends the following: IT managers and supply chains leaders should work closely together to discuss current opportunities without losing sight of long-term digitization programs. Looking to the more distant future, it's worthwhile looking at cutting-edge technologies such as Machine Learning, RPA or Big Data; however for immediate quick wins in the crisis, tools that can be integrated quickly are the ideal solution right now. In particular, analysts recommend simple technical extensions that quickly integrate additional stakeholders into the information chain.

That is because not only the transport of physical goods experienced challenges during the crisis – the exchange of information also proved to be susceptible. If information about supply bottlenecks and interruptions does not reach retail markets or production facilities on time, it creates uncertainty and it makes it more difficult to react with the appropriate countermeasures on time. The effects are then severe: obvious bottlenecks can cause panic reactions in consumers, such as panic buying.

According to Gartner, one of the main challenges now is to deploy systems, communication portals and applications that can help manage risk and speed up the supply chains.

Supplier portals create transparency

Our LEA Reply™ Supplier Portal is the cloud-based tool which enables real-time visibility of incoming goods from your supplier network. The solution networks suppliers, retail markets, and production and takes into account the actual conditions at the local supplier's – be it fruit growers, butchers or manufacturers of protective equipment.

A sensible supplier portal does not place great demands on a company in terms of hardware: a PC, a printer, and a barcode scanner, for which a consumer device can be used, are sufficient. Also, connecting new suppliers via such a portal, including staff training, is not very time-consuming and does not require in-depth IT knowledge.

The delivery labels that are printed out are scanned with the mobile device and the information on upcoming delivery quantities is immediately available to the retail markets; this makes it possible to react on time with regard to smaller or excess quantities and to replan accordingly.

Fast response times despite lengthy digitization processes

Fast response times despite lengthy digitization processesA digital supply chain provides decisive advantages: on one hand, the transmission of information on the status of deliveries is immediately available to all parties involved. On the other hand, the amount of work involved in recording and transferring data to different systems is drastically reduced. Last but not least, social distancing is easier to practice because digital information does not require any physical contact.

The current crisis has shown that the challenge facing retailers (especially in areas such as protective and medical equipment) is enormous and can have serious consequences if major disruptions occur. Greater transparency and predictability as well as a smooth flow of information can make a decisive contribution towards keeping the supply chains between manufacturers and consumers intact to a significant extent. The current exceptional situation calls for supply chains to be made more agile, robust, and generally more efficient for the future.

However introducing a new tool does not mean the digitization of the supply chain is complete: comprehensive, long-term digital planning is also required, during the crisis and beyond.