The Future of the Supply Chain is Taking Shape Today

The COVID-19 crisis is sparking one of the most challenging times since World War II, hitting both brands and manufacturers, in all industries. By causing blow after blow to both supply and demand, the pandemic has developed a huge storm, affecting everybody’s supply chain.

Indeed, developing an effective supply chain response to the coronavirus outbreak is extremely challenging. Mitigating risks and establishing a sustainable supply chain to prepare for any future crisis, that’s now the goal for every company around the world.

Digitization & the ability to work remotely have never been more important

Employees in quarantine, flights cancelled and borders closed. The emergence of the coronavirus has shaken the entire world. New technologies have started to play a crucial role for companies and their day-to-day activities. Live streaming, web conferencing, online messaging, and online training have allowed national and international companies to continue their business, despite several thousand kilometres of distance between colleagues.

One of the most affected sectors by this crisis is probably the supply chain. With the increased globalization in the past decades, many companies are now facing problems to secure raw materials and components and to protect their lines of supply.

Some companies cope better than others, notably the companies that had already invested in digitization before the crisis hit. They have all the necessary data available in their system, in order to make faster and more informed decisions. They immediately know which components, products and suppliers are at risk, which allows them to anticipate potential inventory problems and take instant action. In addition, the digital tools allow them to develop a strong internal and external communication system, which is extremely valuable when team members and supply chain partners are no longer able to meet face to face.

With the ongoing spread of the coronavirus, online learning & collaboration platforms have also become increasingly essential, not only for schools and universities, but for companies as well. In fact, managers face an increased need to train their (often restructured) teams on new company initiatives and help them to be more efficient in their day-to-day activities. E-learning tools allow companies to train not only their team, but also manufacturing partners on various topics of their choice and to track the training progress, wherever they are located in the world. It also enables them to share important information more efficiently.

Ensuring your brand reputation in times of uncertainty

On the quality and compliance side, the main challenge during this crisis is to keep ensuring the best product quality and factory compliance, even if your team is working remotely and social distancing is required. Many brands are struggling to maintain control over their production activities. They don’t have visibility over what is happening at the factories and are worried about the quality of their product and the on-time delivery – which is crucial for their brand reputation.

This is why many companies have started to rethink their supply chain strategies. They are looking to mitigate supply shocks from any future events of a similar scale. Instead of depending on factories in China and South-East Asia, they are starting to move their supply chains closer to home.

The restructuring of the supply chain industry will have a big impact on factories all over the world. On the one hand, Asian factories will have to become more efficient to compete in the new structure. On the other hand, factories in Eastern-Europe, North-Africa and Latin-America need to prepare for this shift and upgrade their way of working, in order to be as attractive as possible for buyers looking to relocate their production activities. Again, the solution lies in the digitization of the processes.

Digital self-inspections can eliminate the need for brands to send inspectors to the other side of the world. By digitizing quality inspections, brands can hand over the responsibility to the factories to deliver the best quality products, while still maintaining full visibility on the process. They can still track the progress of each inspection in real-time, and at the same time reduce travel costs and keep their team safe.

For the factories closer to home, virtual inspections can also bring a huge advantage. By digitizing the product inspections, factories can gather valuable insights that will ultimately improve their product quality and therefore reduce chargeback costs. In addition, digital audits will allow factories to continuously assess their situation, and to make sure health and safety measures are put in place and are being followed correctly. The subsequent upgrade in brand reputation is priceless in times when brand buyers are shopping around for new, efficient and high-quality suppliers.

For more information about virtual inspections, virtual audits, virtual self-inspections and e-learning, don’t hesitate to contact us. We’re here to help.