At the beginning of the Covid-19 pandemic, the supply chain industry found itself with immense pressure and challenges posed to their already demanding industry and sectors. Now with the ‘new normal’ settling in and creating new ways for people to shop and live, the supply chain has had to adjust once again. In this article, we will take a look at:
- some of the challenges and pain points faced by the supply chain industry
- how development funding can help curb some of these challenges
- what the new normal holds in store for this industry
- where you as a business or investor can help in ensuring smooth transitions as well as product and service delivery run smoothly.
Scarcity In Materials
The Covid-19 pandemic is a reality we are all facing and has managed to worm its way into our day to day lives, affecting the decisions we make. There has been an abrupt rise in demand from customers for certain products and services (especially healthcare and medical supplies), making the supply chain industry a little overwhelmed with providing these. The scarcity of products and services affects the supply chain industry in a major way as there are not enough deliveries and logistics services being made to fit the demand from customers. While the demand from customers may be an opportunity for supply chain companies to provide services, it poses a huge threat to material supply industries and, in turn, makes supply chains stagnant.
An Increase In Freight Costs And Prices
While the above section showcases the lack of supply of material, the demand for container shipping has grown during the pandemic. This is due to more demand for online purchasing, making suppliers and manufacturers seek ways to store and deliver products, and since this demand was much more substantial than anticipated, it was met with insufficient shipping capacity and an unprecedented shortage of empty or available containers.
No More Predictable Demand Forecast
The height of the pandemic changed the way businesses and marketers predict buyer behaviour and interests. While the world was already moving to buying more sustainable and organic products and services, none of the marketers and businesses were ready to serve a pandemic-scared population. This has driven a huge need for data driven research and not just relying on gut and instinct, creating even more opportunities for data analysts, collectors and scientists.
How Do We Serve ‘New Normal' Demands?
The many changes taking place in the new normal have added more stress and complexities to entrepreneurs who have always had to adjust to ever changing customer demands. However, there are always methods and ways being tried to better understand and engage with target audiences across the board. The supply chain industry has come with strategies to ensure they keep up with the new normal. Let’s take a look at a few:
1. Automatic Purchasing
Continually monitoring inventory levels takes up too much time. Newer Enterprise Resource Planning (ERP) systems with Supply Chain Management (SCM) functionality feature automated purchasing, meaning they can be programmed to place orders with vendors automatically when the inventory levels reach a certain level or below.
2. Standardise Processes
Having ERP systems that are standard helps supply chain companies with increased efficiency while saving time and money. Standardised tools also help employees with increased accuracy, encourage teamwork and reduce miscommunication.
3. Increase Transparency
Like every industry, the supply chain sector also has permanent challenges such as waste, mistakes in production, and even fraud. Through transparency around ERP systems and software, supply chain companies stand a better chance of keeping track of the ins and outs of their day to day.
4. Gain Data Insight
By now, every supply chain company knows how important data collection and analysis are. It provides accurate and timely information that helps you create better ways to service your partners and consumers.
5. Improve Returns Management
Every solid supply chain strategy needs an efficient returns management system. Manufacturers must be able to effectively handle returns so they can quickly re-process or re-manufacture returned products or units.
Final Words
As development finance institutions, we are passionate about bringing simpler ways for businesses, suppliers, and consumers to live and shop. We provide financial aid in the form of loans and supply chain development programs to give different sectors the tools they need to function.