The COVID-19 pandemic was a wake-up call for supply chain stakeholders to the need for greater supply chain resiliency. Catching many off-guard, the coronavirus outbreak serves as a warning that lessons have to be learned about the importance of maintaining robust supply chain optimization strategies for unexpected events.

COVID might be “so 2020”, but there's no escaping the fact that it was a watershed event for global trade.  The pandemic exposed supply chain vulnerabilities but it revealed an opportunity to build global supply chains with greater resilience.

We reflect on COVID not to dredge up some of the darkest days the shipping industry ever faced but to be better prepared for supply chain disruption in the future.

The emergence of global trade management (GTM) software has been central to progressing in the post-pandemic era. GTM compliance software has helped companies adapt their supply chain structures using technology to increase operational agility, improve sustainability, and ramp up resilience.

Adapting Supply Chain Structures

If there's one key lesson that can be taken away from COVID-19, it's the importance of a stable supply chain structure. New market demands and the need to mitigate risks mean that adapting the structure of the supply chain is more important than ever.

Disruptions in the aftermath of the pandemic prompted a whole new outlook on the dynamics of global trade. There is now greater urgency among companies to evaluate their supply chain strategies on a regular basis to ensure adaptability and resilience.

Shifting Manufacturing Strategies

A key trend that's emerged in the post-pandemic era is shifting manufacturing strategies as businesses step up their efforts to create more adaptable and resilient supply chain networks.

Companies are rethinking their manufacturing locations to shorten supply chains, reduce their dependency on long-distance suppliers, and minimize disruption. This has seen businesses move toward friendshoring and nearshoring manufacturing models to create a more responsive supply chain network.

Friendshoring is the forming of strategic alliances with neighboring countries or regions to reduce supply chain lead times, lower transportation costs, and improve communication and coordination with suppliers.

For example, Mexico has become a friendshoring hotspot for many big businesses looking to stabilize their supply chains. This includes Tesla, which recently announced plans to build its first Electric Vehicle (EV) manufacturing plant in Santa Catarina, near Monterrey - at a cost of $5 billion.

Equally, nearshoring has become a viable option for businesses, allowing them to relocate manufacturing operations closer to end markets to reduce supply chain risks and improve responsiveness. The benefits include shorter lead times, lower inventory holding costs, and greater control over production processes.

Leveraging Technology for Enhanced Visibility and Responsiveness

Hot on the heels of shifting manufacturing strategies is the switch to advanced technologies like Artificial Intelligence (AI), The Internet of Things (IoT), Blockchain, and Global Trade Management Software, which have served to improve supply chain visibility and control in the post-pandemic era.

Real-time tracking, inventory management, and demand forecasting are now readily available to supply chain stakeholders, opening doors to greater resilience and responsiveness. Here's how:

• Real-time tracking with IoT: Internet of Things devices, like sensors and RFID, are increasingly being used across supply chains to track the movement and condition of shipments in real time. IoT technology can transmit data on location, temperature, humidity, and shock levels, providing stakeholders with actionable insights into the status of shipments.

• AI-driven inventory management: AI has emerged as an efficient solution for optimizing inventory management processes by analyzing historical data, demand patterns, and market trends. AI-powered inventory management systems can accurately forecast demand, anticipate stockouts or overstocking, and recommend replenishment strategies.

• Blockchain for transparency and traceability: Blockchain tech is being used to enhance transparency and traceability across the supply chain by keeping an accurate record of transactions and events. Every transaction recorded on the blockchain is intrinsically linked and time-stamped to maintain data integrity and security.

By integrating AI, blockchain, and IoT technologies into supply chain operations, companies gain a new level of visibility and control over every touchpoint. Businesses now have granular information available almost instantly to help make data-driven decisions, optimize resources, and proactively mitigate risks.

Embracing Agility and Sustainability

Beyond technology and shifting manufacturing strategies, supply chain optimization efforts are increasingly focusing on agility and sustainability to meet changing customer expectations and address environmental concerns.

Building Agile Supply Chains

In the aftermath of the COVID-19 pandemic traditional supply chain models have increasingly made way for agile frameworks. Agile supply chain networks give greater priority to flexibility and responsiveness, making it easier for companies to quickly adapt to changes in demand or market conditions.

For example, customer loyalty is no longer a given. According to McKinsey & Company, during the COVID-19 pandemic, 77% of US consumers changed stores, brands, or the way they shop. An agile supply chain model equips businesses to proactively respond to big shifts in customer behavior.

Strategies such as modular production, diversified sourcing, and dynamic distribution networks have helped to accelerate the switch to agile supply chains and minimize the risk of disruption.

Prioritizing Environmental Sustainability

The call from Governments, climate change experts, and consumers for sustainable supply chain practices is growing louder. This has prompted many companies to integrate sustainable practices into their supply chains, including:

• Greener logistics solutions: There has been a rapid rise in companies switching to low-emission vehicles, optimizing shipping routes to reduce fuel consumption, and using alternative modes of transport such as rail and sea freight.
  
  
• Route optimization: Companies are using advanced analytics and optimization algorithms to identify more efficient transport routes, taking into account factors like distance, traffic patterns, and emissions levels.
  
  
• Sourcing from sustainable suppliers: More companies are striking up partnerships with suppliers that prioritize sustainability initiatives.

This includes sourcing raw materials and components from suppliers with certifications such as Fair Trade, Organic, or Forest Stewardship Council (FSC) certification.

Enhancing Supply Chain Resilience

COVID-19 proves that the unexpected is around every corner. That's why supply chain resilience, especially in the face of unforeseen disruptions, serves as a safety net for EVERY company.

It's no coincidence that more businesses are switching to strategies that strengthen the supply chain in an effort to minimize the impact of future disruptions. Here's how companies are doing it.

Diversifying supplier bases

Reducing reliance on a single source of supply mitigates the risks associated with supplier concentration. By diversifying supplier bases across different regions and markets, companies are finding that they can minimize the impact of events beyond their control, like geopolitical upheaval and natural disasters, easing disruption.

Investing in Risk Management and Recovery Capabilities

In the wake of the coronavirus pandemic, companies are actively investing in robust risk management frameworks and recovery capabilities to get a better grip on managing supply chain disruptions effectively.

There has been a significant spike in the number of businesses investing in insurance, contingency planning, and alternative sourcing strategies to reduce risks and safeguard the continuity of operations.

Key Statistics and Future Trends

The future of supply chain resiliency arguably rests on data and the role it will play in driving informed decision-making and optimizing operational efficiency. The emergence of data-driven supply chains is likely to have a lasting impact on:

• Spend analysis: Procurement teams have access to more accurate and granular spend data than ever before. This includes data on purchases, invoices, contracts, and supplier performance metrics, which helps companies to better identify cost-saving opportunities, and make informed procurement decisions.

• Logistics costs reduction: Logistics costs account for between 25% and 45% of total costs and up to 20% of product prices, depending on the activity and type of business. Data-driven insights will help to optimize transport routes, consolidate shipments, optimize inventory, improve warehouse efficiency, and enhance supplier collaboration, reducing overall logistics costs.
  
  
• Rise of online ordering: Amid the rise of online ordering, data will strengthen supply chains by improving shipping visibility, helping to personalize customer experiences, and increasing service reliability, driving efficiency, agility, and competitiveness in the digital marketplace.
  
  
• Demand forecasting: Data-driven demand forecasting uses historical sales data and market trends to accurately predict future demand. This enables supply chain stakeholders to anticipate fluctuations and proactively adjust inventory. This boosts supply chain resilience by ensuring a timely response to changing market conditions.
  
  
• Digital supply chains and automation: Despite economic pressures, continued investment in digital supply chains and automation is expected to accelerate, further contributing to supply chain resiliency. For example, 76% of manufacturers are integrating digital tools to gain enhanced transparency in their supply chain.

Build Supply Chain Resilience With Global Trade Management Software

TradeView Global Trade Management Software offers visibility into maritime handlers and traceability to evaluate performance, risk, and shipment history for 500 million suppliers and logistics providers.

The platform can identify regulatory compliance and ESG concerns within the value chains of products and companies. Monitor the live flow of any company’s shipments 30 - 90 days before arrival at destination and analyze trends across 10 years of historical supplier, products, and logistics movement data.

Book a demo with Vizion to build the operational resilience you need to succeed.

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