Because of COVID-19, or the novel coronavirus, the supply chain as we know it has changed practically overnight.
Already strained by economic factors, global supply chains are taking a major hit as the world adjusts to the new realities brought by COVID-19. Localized panic buying has created unprecedented shortages of certain medical and food supplies, while supply chains of non-essential products have come to an indefinite halt. Meanwhile, many manufacturers have no choice but to shut down for the foreseeable future.
Amazon’s innovations in two-day, next-day and same-day shipping are experiencing an exponential slow down. Companies that previously offered rapid turnaround for delivery, like pet product provider Chewy.com and Amazon itself, struggle to deliver even essentials in five to eight business days.
Even though all these factors point to a possible collapse, the reality is that the world will rely on the supply chain more than ever in the coming year. This will become clearer as the impact of the coronavirus may be felt for 18 months or more.
The new supply chain paradigm will require a greater focus on technologies like mobile barcoding and data collection that augment a small labor force while safeguarding health and human safety.
Interested in how COVID-19 impacts manufacturing? Click here.
Interested in warehousing and distribution? Keep reading.
Mandatory “stay-at-home” orders now affect millions worldwide, necessitating a dramatic shift in our daily lives. According to a recent Kardex survey on the impact of COVID-19 on warehouse professionals, 44% of workers are currently working remotely and 35% are rotating between working at home and being onsite.
Rather than collapse under the change, the “new” supply chain paradigm is quickly taking shape as restaurants switch operations from dining-in to delivery, while online retailers ramp up fulfillment. Demand for home delivery of essential goods and groceries has surged as the general public increasingly shelters in place, practices social distancing or faces in-home quarantine.
Amazon recently announced that they are hiring an additional 100,000 workers to fulfill the ballooning demand. Domino’s Pizza is proactively hiring 10,000 workers to handle the expected influx of delivery orders. Walmart is following suit.
These big initiatives suggest that the early adopters for change will be those who come out on top in the new supply chain schema.
Not only that, but other industries that face total shutdown, such as bars and hospitality, leave large potential workforces available to fill roles in the supply chain.
As we’ve seen in the traditional supply chain, simply increasing the size of the workforce is not enough to scale processes efficiently, or to increase productivity while simultaneously decreasing operating cost. If your business doesn’t have technology in place to ensure end-to-end visibility of inventory inside and outside the four walls, rampant inefficiency may be hiding in your workflows.
Even with increased hiring, finding enough labor may prove difficult as more individuals face quarantine and self-isolation. But with the radical increase in shipping, the ability to fulfill orders faster, with greater visibility and in much higher volume, how can the supply chain cope?
Digital supply chain technologies that augment smaller labor forces, like enterprise mobility with barcoding, can fill the gap.
Mobile barcoding technology built on data collection best practices can transform warehousing and distribution operations. Automating the data collection process for frontline warehouse, manufacturing and field services personnel can drive inventory accuracy to 99.5% and above.
The mobility aspect maximizes productivity, flexibility and safety by extending critical ERP data to wherever your employees work. Those who implement mobility can expect to see 30% increases in both productivity and efficiency.
Not only that, but it’s easy and intuitive to learn, reducing training and onboarding time for new employees by 80% or more.
Like the distribution and fulfillment supply chain, the manufacturing supply chain will survive, but it will also change. Many operations are going dark, effectively shutting down all manufacturing facilities deemed non-essential.
The medical supply chain is already facing a vast shortage of critical supplies like face masks and ventilators. New York, which currently has the largest number of COVID-19 cases in the United States, estimates a shortfall of 18,000 ventilators. Doctors at major hospitals in Seattle and Washington, D.C. are already being forced to reuse masks, even after coming into contact with infected patients. Some are even sewing their own.
In order to avoid catastrophic stoppages, some manufacturers are re-tooling to produce these much-needed medical supplies, such as masks and ventilators. Not only will this prove instrumental in preventing mass shortages, but it will also keep production floor staff employed at a time when they might otherwise be out of work.
In China, manufacturers have repurposed factories that once made iPhones, shoes and cars to make these critical materials. China can now produce 200 million masks a day, more than twenty times the amount produced in early February.
U.S. automakers are starting to do the same. Ford and General Motors, who have shut down their North American plants, have been in discussions with the White House about restarting these facilities to produce masks and ventilators and help bridge the U.S. medical supply chain gap.
As manufacturing re-tools to making medical supplies for the COVID-19 crisis, new oversight tools for inventory may be required. Manufacturing medical equipment such as ventilators, tubing, valves, masks and gloves requires a high level of quality control to meet modern standards.
Rapid, real-time digital control and 24/7 visibility for materials for receiving, production, staging, picking and distribution will be crucial. Using ERP mobility technology for manufacturing, inventory and maintenance can enable manufacturers to accelerate production and supply chain activities.
Many medical device manufactures have been using technologies like mobile data collection, barcoding and manufacturing enablement solutions for years. For example:
Ascent Healthcare (now a part of Stryker Sustainability) modernized their inventory practices with RFgen’s mobile data collection solutions to gain:
Among many others. Read the full story here.
Ascent’s primary focus lies in reprocessing used medical equipment for re-use – a business that may become more common in the coming months.
Other, more traditional medical manufacturing companies experienced similar benefits:
The future of manufacturing is not as grim as some predict. The way manufacturing contributes to society will simply change. This is made clear by history.
During World War II, America’s mass re-tooling of domestic manufacturing to produce vehicles and equipment for the armed forces proved instrumental to ultimate victory. As manufacturers worldwide prepare to re-tool to combat the novel coronavirus, having the right supply chain mobility technology in place may prove imperative in the fast-moving global war against the COVID-19 virus.
Ultimately, the use of this mobility technology will better position our supply chain, and our workforce, to make the critical adjustments needed in this uncertain time.
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