Supply Chain Management in the Time of a Pandemic
In 2020, the entire world was hit by the COVID-19 virus, which infected millions of people and disrupted the global economy in unprecedented ways. Almost overnight, countries around the world shut down their borders and controlled the influx of goods in a bid to stop the spread of the disease.
While this might all seem like a recipe for a complete meltdown of international trade, the industry has somehow survived, thanks in part to shippers, suppliers, and distributors redefining how they do business and how they can minimize the human impact of their operations.
Some of the most successful consolidated international shipping providers had to rethink how they approach their business in the time of a pandemic, and hopefully, can help future businesses come up with a blueprint on how to maintain “business-as-usual” operations during times of global crises.
Re-evaluate Your Source Suppliers
It’s no secret that China supplies a majority of the world’s industries, from smartphones and computers to automobiles and aerospace to digital products like games and apps. Unfortunately, in the case of the 2020’s COVID-19 crisis, the virus originated from China, which meant that shippers and distributors needed to be cautious when sourcing their supplies from the Asian giant.
International shippers who survived the pandemic, however, didn’t just shun China like a leper. They adopted policies like focusing on workforce and labor planning, flexibility in production schedules, and while most major trading partners like Japan moved their factories away from the epicenter, they didn’t fully close off their doors to the Chinese market.
For the successful shipper and distributor, it’s all about safe practices and an adapted business plan that allows for continued trade with the world’s largest supplier while minimizing both human and economic costs.
Redefine Your Inventory Strategy
During a global pandemic, consumers will understandably shift from demanding luxury goods and products to demanding more essential, low-value items. Shippers and distributors, however, shouldn’t view this as a loss of profit. Redefine your inventory systems to prioritize essential low-value items without necessarily sacrificing luxury goods.
Successful shippers and distributors take a close look at their inventories and their suppliers and choose the ones that are most relevant, without necessarily sacrificing the non-essentials. Instead, save the high-end products for after the crisis ends. Having stocks of non-essential high-value items when trade restrictions ease is going to be a boon to your business specifically because other shippers and providers might fully shift towards low-value items, and thus, might not be able to compete once trade restrictions are lifted.
A New Supply Chain Model?
Finally, perhaps the best way for shippers and providers to not only survive a global crisis like a pandemic but also thrive once the crisis ends is by adopting a new supply chain model that prioritizes flexibility of services, agility in distribution, and a focus on leveraging advanced tech like the Internet of Things, 5G, robotics, and other digital solutions.
But foremost of all, for shippers and providers to survive a pandemic and its aftermath is to not view it as a temporary conundrum, but rather, as the ‘new normal,’ which means that new rules and standards should apply here on out.