Managing the COVID-19 Supply Chain Disruption
The COVID-19 pandemic highlighted fundamental flaws in the disruption of the global supply chain. Thus, forcing businesses to pivot to new commercial warehousing solutions. While it’s impossible to predict the future, you can secure your business by creating contingency plans to protect your supply chain. Understanding how COVID-19 impacts commerce is paramount to determining how your business can succeed in the new world. With the proper planning, it’s possible to manage supply chain disruption with minimal impact on your company.
Understanding How COVID-19 Impacted the Supply Chain
Production businesses without reliable, local commercial warehousing were drastically impacted by transportation issues, contact tracing, and quarantine regulations. The shipping process developed an added layer of bureaucracy to adhere to public health. International shipping was either halted or delayed, with the Canadian-American border closing. Without a place to store goods close to their final destinations, companies lost contracts and necessary revenue. It resulted in mass layoffs and increases in consumer pricing.
The implicit costs that companies incurred during the pandemic are difficult to quantify, though studies suggest up to 97% of industrial production businesses saw a negative impact on their profits. Some sectors were able to transition to a remote workforce, but the manufacturing industry doesn’t have that liberty. Factories are not immune to public health regulations either, adding the cost of personal protective equipment and enforcing distancing measures. These expensive changes resulted in notable production downtime and added expenses.
Supply Chain Solutions to Avoid Disruptions
COVID-19 is not the first economic challenge that impacted the supply chain. From the Great Depression of 1932 to the global recession in 2007, companies face crises regularly. Some are political, whereas others are social; and, as we now know, some are medical.
Considering this, it’s important to prepare for the next issue. There are several ways businesses can be ready for another supply chain disruption. In fact, if companies can learn from the issues the pandemic highlighted, they can streamline processes and actually profit from the challenges of the pandemic. Among the ways to address supply chain issues are:
Increased digitization and robotic labour is an upfront investment for companies that creates sustainable infrastructure for the future. Automation refers to any opportunity to use technology to streamline a process. In the manufacturing business, this often includes machinery that can quickly perform a certain function repeatedly and accurately. For instance, CNC machines drill precise shapes, but they require the input of an engineer. Automation isn’t a workforce replacement; it’s a complement to the existing structure.
Among the automation opportunities are inventory tracking software and predictive algorithms to determine when it’s best to make orders. By incorporating technology that reinforces transparency across the supply chain, you can better forecast economic conditions.
Thorough tracking of all your products ensures that you understand the actual demand for each item. By using digitized management systems, you can move the administrative side of your business to a remote structure and reduce your workforce altogether. Supply chain algorithms can advise on order quantities, cost modeling, and timing.
Localizing Your Supply Chain
Choosing a production facility and commercial warehousing solution that’s close to your clients is paramount to success. Even within Canada, the provincial border regulations made it difficult to predict supply chain issues. Companies that sourced products from Asian nations for cost-effectiveness suffered reduced access to operational supplies. Conversely, businesses that stored inventory within Canada, sourcing its materials domestically (or in bulk), were able to maintain function throughout the pandemic.
Review your supply chain from top to bottom. Is there a closer manufacturer you can work with that may cost slightly more, yet be more reliable as well? Can you move your warehouse facilities to a closer location, thus reducing the costs and logistical issues associated with transportation? Identify opportunities to bring your business closer to home and consider how they apply to your business’ operations over the short and long term.
Refreshing Your Logistical Approach
Business silos were once a popular way to organize companies, with separate departments handling different aspects of the supply chain. Manufacturing remained at the factory. Shipping and receiving focused on only those aspects of the company. While it succeeded for some time, COVID-19 highlighted some of the inherent flaws of that approach, including problems with communication and data management.
Modern logistics focuses on transparency by leveraging updated technology to reduce silos by providing real-time, accessible data. The immediate shock of COVID-19 showed businesses how interconnected the supply chain is, and many companies adopted a holistic way to approach logistics. A popular model is incorporating the Internet of Things, 5G connectivity, and modern robotics not to replace staff, but rather to improve efficiency and reliability of business function over time.
Focus on Sustainability
Companies across the world were tested by economic destruction, border restrictions, and a global pandemic during the COVID-19 supply chain disruption. It highlighted the resiliency of the workforce, showing that despite challenges, there is a way forward. Businesses responded to the need to repair the supply chain. While at first it was a matter of clearing bottlenecks in the distribution channels, it evolved to the need to find a long-term solution to supply chain issues.
Businesses can pivot their focus to sustainable infrastructure, carbon footprint reduction, and long-term worker health. Localizing operations, including inventory storage and productions, can assist in retaining a market share for any industry. Companies that plan for both the near and distant future are in the best position to remain operational over the long term.
Reliable Commercial Warehousing in Ontario
Identifying a trustworthy, qualified commercial warehouse in Ontario allows you to focus on operations without worrying about border restrictions. Modern warehouses rely on advanced technology to improve inventory control, provide full transparency, and reduce loss. The pandemic resulted in improvements in software, automation, and inventory tracking. Companies that depend on these updated supply chain protocols, such as localization and real-time tracking, can emerge from the pandemic with streamlined operations and increased profits.