July 24, 2020 | By Nick Shroeger
Tags: 3PL, Supply Chain Management, Demand Planning
Due to the current uncertainty of the global economy, shippers are experiencing new, unique challenges. As they navigate these challenges, understanding the shifts in consumer behavior and how they impact their supply chain is critical.
While consumer mentality is improving, concerns about COVID-19’s impact on the supply chain are still top of mind for shippers. New concerns and challenges are fueling shippers to shift their strategies and plans for the remainder of 2020 and beyond.
Shippers of all sizes share one common concern: keeping their people safe, whether operating in their facilities or at home. However, in many cases, this is where the similarities end.
Shippers’ priorities also center on four additional areas:
1. Maintaining operational efficiency.
2. Keeping team members productive despite disruption.
3. Making necessary strategic shifts in production.
4. Managing rapid, frequent shifts in demand.
While some shippers work to streamline operations, others focus on keeping up with demand. A high priority exists for supporting employees on the front lines, ensuring facilities have procured and made available crucial safety items.
Other priorities include managing increased production, despite lower processing rates stemming from facility regulations that require social distancing and safety procedures in addition to fewer employees on each shift. Keeping supply chains running smoothly is made more difficult as shippers deal with imbalanced inventory and volatile transportation schedules.
How 2020 Plans Will Change
Companies across all areas of the supply chain have seen the importance of developing new strategies to better address the current situation and prepare for future disruptions. They will rely less on short-term, cost-based decisions and instead will prioritize being proactive, efficient, and flexible.
We have already seen shippers pivot their 2020 plans to address these new priorities, which include:
Working with a 3PL provider that offers capacity to ship freight.
Collaborating directly with other shippers to share insights and best practices.
Shifting live-load pickups and deliveries into drop trailer.
Creating pop-up fleets at surging origin points.
Narrowing the number of SKUs to reduce unnecessary variety.
Focusing production toward speed, efficiency, and flexibility.
For some, identifying ways to better prepare their businesses for future disruption and implementing new processes will go smoothly. However, this does not mean all uncertainty can be avoided. Shippers are asking the same big questions: How do I keep employees healthy and safe? How do I limit disruption to my supply chain? How do I keep facilities up and running efficiently?
Since the pandemic began, shippers are doing what they can to limit disruption within their supply chains and keep critical supplies and products moving.
As the economy moves toward recovery, we anticipate a surge in demand and, therefore, an increase in volume. Industries, especially those whose shippers slowed down or stopped, will have lean inventories and, when the demand for such products rises, need to increase production. Although shippers should be prepared to see varying results compared to their original 2020 goal, a recovery in consumer demand is not too far away.