Lindsey Mazza, Global Retail Supply Chain Domain Leader at Capgemini, assesses the ongoing impact of the coronavirus pandemic and the lessons to be taken from the crisis.
“Moving past this pandemic will not simply be about recuperation, but about innovation. There is a need for global coordination to help organisations redefine their supply chain capabilities, so that they can have the flexibility to initiate a rapid response when needed, and create intelligent supply ecosystems. This will enable them to mitigate future risks, protect the functioning of global supply chains and minimise disruption.”
“More than simply recovering, the current pandemic has been a near mandate for organisations to digitise their supply chains.”
If one thing is certain in these extraordinary times, it is that the COVID-19 crisis will fundamentally change the way organisations of all shapes and sizes approach their day to day business.
Be it embracing remote working, encouraging more flexible working patterns, or simply re-evaluating the value different roles bring to a company and wider society, the past few weeks and months have been a time of reflection for many entrepreneurs and business leaders.
The opening statement is made by Lindsey Mazza, Global Retail Supply Chain Domain Leader at Capgemini, and better placed than most to discuss the impacts and ramifications of the coronavirus pandemic for a critical cog in the commercial machine – supply chains.
“COVID-19 has highlighted the weak links in supply chains across the globe,” she says. “It’s indiscriminate – companies from the Fortune 1000 to small enterprises are experiencing supply chain disruption caused by the fallout.
“Retailers are realising that they lack the agility needed to cope with sharp rises and falls in demand brought about by these unprecedented circumstances, and there is a real call to action for companies to invest in digitising their supply chains.”
Capgemini’s latest statistics reveal the scale at which this needs to happen.
Last year the company found that just 15 percent of firms have digitised supply chains, with 60 percent stating that they intend to do so.
And doing so is a wise move – according to Capgemini figures, companies that invest in digitising their supply chain and procurement on average generate an 18 percent return on their investment within 12 months. As services resume, supply chain digitalisation should be top of the agenda for business decision-makers.
But what about the shorter term? How can companies act now get their supply chains back on track?
For Mazza, the key is to establish what Capgemini calls human control towers in the absence of digital supply ecosystems. Such people can help in a range of areas, from balancing demand-supply to prioritising orders, and are given the mandate to take short-term decisions quickly, allowing organisations to react to this fast-moving situation.
Firms which have invested in improving demand forecasting, transparency and efficiency will also experience benefits during this transition from COVID crisis to the new normal, not least because such tools help to mitigate the impact of unforeseen disruption.
“For example, supply chains that use a hands-free picking process in warehouses – enabled by automation and robotics – can move goods more safely and quickly than organisations that rely on manual, human-based sorting,” Mazza explains.
“Another example is companies that use AI and machine learning enablement for forecasting. They will be able to quickly shift what product goes where and the timing of when products are shipped to them, and thus have an immediate insight into where their inventory is at any given moment, enabling them to better weather the current storm through demand sensing.”
Mazza also believes that the coronavirus pandemic has highlighted the need for companies, especially delivery-based retailers, to think outside of the box.
While automated, smart warehousing operations are a must for long-term, reliable and efficient supply chain operations, innovation is also required at the last mile, and drone technology represents one potential answer despite their current imperfections.
“Drones have long been on the radar as a possible delivery device – one with which Walmart and Amazon have experimented,” Mazza continues. “However, they’ve never really taken off due to restrictions and concerns relating to flight paths and airspace regulations. We’ve now seen the first drone used for delivery in Ireland, where airspace is unrestricted.
“For the moment, drones are a novel and safe way to meet customer needs in remote areas, where it is difficult for traditional vehicles to get to with reduced manpower. Drones also help to reduce the impact of shift changes caused, for instance, by the sickness of a large number of workers. While it is unlikely that they will become the go-to means for delivery, if these initiatives are successful we may soon see a rise in drone deliveries in unrestricted airspace.”
In years to come drones could conceivably become part of the new normal which Mazza earlier alluded to.
Once the coronavirus crisis has passed, consumer patterns may not return to exactly the same balance as they were before – the shift towards online shopping and home deliveries may accelerate further as people become more reliant on it during the lockdowns.
For Mazza, it is critical that lessons are learned in order to adapt to whatever environment is left post-pandemic.
She concludes: “The current disruption from COVID-19 has the potential to have long-lasting implications on supply chain function and workforces.
“There is a need to organise a proactive and holistic response, looking into end-to-end exposure, associated risk, and operations management capabilities for all critical functions. For the moment, the focus is rightly on crisis response and recovery, but we can learn from this experience and that will build resilience for future disruptions.”