Supply Chain and Packaging
Other / June, 18 2021

Data-driven Supply Chain and Packaging Solutions in the “New Normal”

The supply shock that started with Covid-19 not only created a demand shock with multiple lockdowns across countries, but also exposed vulnerabilities in production strategies and supply chain for many enterprises. Product shortages, capacity constraints, and global supplier networks triggered continuous disruption in the supply chain across industries. The gradual re-opening and further lockdowns did not ease the situation, but the disruption became idiosyncratic. Around 72% of the companies reported a negative effect on their supply chains post the pandemic, as per EY supply chain research. The weaknesses exposed by the pandemic are not new, a few industries are in the path of ‘doing digital’.

What next?

‘Doing digital’ is just an outline but ‘Being digital’ is the need of the hour. Connected digitized smart supply chains are the ‘New Normal’ for global industries to face such inconsistent but continuous challenges. Covid-19 maybe just one, but many may follow in the coming years, resilience while being interconnected can only equip the supply chain to rise to any challenge.

64% of the supply chain executives say digital transformation will accelerate due to the pandemic and 52% believe in the autonomous supply chain by 2025, a research report from EY says. With e-commerce being vital for all purchase decisions, packaging optimization is also another big challenge ahead for everyone in the ecosystem.

A Few Strategies for a Resilient Supply Chain

60% of the executives from the EY survey say that the supply chain is now their strategic priority in the ‘New Normal’. The Supply chain in the near future needs to be agile, flexible, resilient, digitally connected, and be visible to everyone in the ecosystem. Let us look at the areas that can help achieve this.

  • The strategic architecture of the supply chain needs to be reimagined – local and distant supplier relationships, warehouse management, inventory levels (finished products, raw materials), workforce disruption (dynamic workforce operating in various models).
  • Agility and flexibility enabled by digitally connected supply chain – enabling digital technologies, automation, and robotics in planning, procurement, logistics, and packaging. Communication between different systems to be enabled seamlessly so that visibility is increased across the ecosystem.
  • Building transparency and resiliency – improving response with real-time visibility and monitoring of end-to-end supply chain and reviewing the supply chain footprint across geographies. Reliance on any single vendor or geography can be the biggest reason for disruption in the near future.

Data-driven Supply Chain Solutions

The real fuel to gain agility, flexibility, and resiliency in the supply chain ecosystem is always data. Distributed global supply chains and just-in-time inventories had driven efficiencies through the supply chain when the economy was stable. Now, the scenarios are changing dynamically, so the supply chains have become a significant risk factor and efficient practices can be derived leveraging data and automation.

Let us look at a few solutions:

Digital Connected Supply Chain – Data sources are now more discrete and obtaining the right information at the right time can only speed up decision making. Connecting internal information with data from suppliers and external partners needs to be simplified.  Fragmentation is another biggest challenge in the global movement of goods today. Ever-changing consumer demand and expectations enable the need for organizations to rethink collaboration across the entire ecosystem. Data sharing leveraged by efficient communication tools enable a more connected community and productivity gains across the ecosystem.

Real-time Visibility – Supply chain is not just a line of activity but involves a multitude of actions. Any delays anywhere in production, procurement, customer demand, and logistics can significantly impact the costs. In a fast-moving crisis, real-time data has an immense impact. For example, Kroger has used data from its intelligence unit to respond to daily fluctuations in customer behavior during the pandemic. Unilever on the other hand leveraged AI to visualize if their suppliers will be able to keep up with the demand, so that quickly turn to alternatives without any disruption for products needed by consumers.

Agile Insights – Analytics is not new in the supply chain ecosystem. So far, it is mostly about leveraging historical data and predicting demand, supply, and inventory optimization. But with the pandemic, it is important to leverage third-party data and real-time data in a swift fashion to arrive at the right insights for decision making. Modeling Pricing has also been tough during the pandemic. Supply and demand are mostly affected by the infection rates and whether the factories remain open or closed. An intelligent pricing model that accounts for real-world conditions is essential in the ‘New Normal’.

Packaging Solutions of the Future

Amid the slowing economic activity, Covid-19 led to a surge in e-commerce sales across the globe. Packaging is another crucial factor now to avoid product damages and improve customer experience. So far, most companies have implemented packaging solutions leveraging information such as product weight, dimensions, volume, freight cost, and labor costs. But the future is more about leveraging information from multiple touchpoints, material handling, customer requirements, replacement costs, ill will, and other product damage information. Package cost reduction and damage reduction will continue to remain crucial while also adding up customer viewpoint to packaging solutions.

The reality in real-time data is the new trend for a resilient supply chain in the ‘New Normal’. Unleash the power of data in your supply chain with an experienced consulting partner like us. Please contact us for more information about our expertise.

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