What Is The Future Of Extended Supply Chains?
The logistics sector has been met with unprecedented struggles in the face of the Coronavirus outbreak. This, along with other factors, may well have compromised the future of extended supply chains. Below, we discuss further.
Threats To The Future Of Extended Supply Chains
There are a number of things that can pose challenges to the future of extended supply chains, including protectionism, sustainability, and arguably most threatening: Covid-19.
Covid-19 & The Future Of Extended Supply Chains
At The Barnes Group, we believe that the best run businesses in the world build robust supply chains along with contingency plans.
Whilst these kinds of businesses were understandably impacted during the pandemic, under normal conditions they should be able to keep up with significant fluctuations in demand. Demand for certain industries has piqued during the outbreak of Coronavirus, much more than anybody could have planned for – it was inevitable that extended supply chains would feel a strain; however, when normality resumes, it has to be presumed that the process will recover.
Businesses should continue to work on the principle of supplying the best value products to their consumers, that will also allow them to run their supply chain at an acceptable level of cost and risk.
When a business decides whether to import product from the other side of the world, many factors are taken into consideration and plans are made to enable a smooth supply into their facilities. Changes to the status quo are always somewhat disruptive, and when Covid-19 is added to this equation, there is little hope of businesses being able to adjust quickly enough to the huge fluctuations in demand.
These swings beyond the edge of the normal distribution curve were pretty much unheard of until now. As such, there is no amount of planning that could protect the supply chain at a cost that would make businesses viable in normal times.
The biggest threat to a well-managed supply chain is undoubtably a global pandemic such as Covid-19, but it is not a threat that cannot be overcome in the long-run.
Will Lessons From Covid-19 Mitigate Future Threats?
When the Covid-19 outbreak is over, there are lessons to be learned. Whilst it’s fair to assume that all companies will adjust their policies to include guidelines to follow in the event of another pandemic, the question of whether a business should use extended supply chains will come down to whether their stock would be in demand.
It’s entirely possible that supply chains could shorten to be closer to home, so that:
- Travel times are shortened
- Changes can be made more swiftly
- Volumes can be changed more quickly
- Quality control is easier to manage
There are lessons to be learned from Covid-19. It was so unexpected and prompt in its arrival, that hopefully some contingency plans can be put into place from lessons learned that may pre-empt any future pandemics that can threaten the future of the extended supply chain.
What Options Do Supply Chain Professionals Have?
A recent study by RetailX revealed that as many as 24% of consumers said they will continue to follow their new adopted shopping habits that they have picked up during the pandemic, meaning retailers and hauliers will have to adjust their procedures – likely to account for an increase in ecommerce.
As normality (or a ‘new normal’) begins to resume, supply chain professionals will have to adapt and adopt. The options they have include:
- Providing a first-class service, coupled with strong marketing & technology
- Ensuring economy for the business
- Adapting competitive pricing models
- Exampling reliability within the organisation
Such attitudes will support the future of extended supply chains.
The Barnes Group is one of the UK’s leading providers of logistical support and warehousing to time-critical businesses. For support for your organisation, please contact us.
