Restarting the supply chain after the COVID-19 disruption

Seventy-five percent of US companies say COVID-19 caused supply-chain disruptions, according to the Institute for Supply Management. But the scale of the shutdown was unprecedented, and it is estimated it will take three to six months before full production returns. Many businesses closed, with only essential services remaining open in many countries.

Social distancing is changing how people interact and that isolation is likely to change the way many shop. There was once widespread resistance to having someone else do the grocery shopping, for example, but online ordering and delivery are now surging. There will be people who find the convenience of having someone else fill the cart something they want to continue, even when stores are open regular hours.

Restarting the supply chain will be challenging. There will be a surge in demand when businesses begin to open again, but it will not be everywhere at once. Regions will open as the infection numbers decrease. And there will be product coming in that no one wants, such as seasonal items. It is about managing both sides of the inventory.

Inventory insights will be key. Companies will need to apply analytics to prioritize inventory placement and shipment. It will be similar to seasonal merchandise for retailers, but now applied to all products. This is not an easy calculation. Like spigots that have held back liquid, one side will be open and gushing and the other will be turned off.

There will also be sourcing issues once economic activity returns to more normal operations, requiring flexible and transparent supply chains to meet current and future demand. Companies need insights into their suppliers and their inventory.

The key is data. Integrating information and creating a data strategy gives companies an understanding of all aspects of their supply chain. At the same time, business-process change will deliver a closer collaboration between all areas of the supply chain to deliver insights to drive efficiencies.

Companies should expect a new level of normal before the markets bounces back entirely. Disruptions are always challenging but restarting the supply chain will be easier with the right data. Having the information to make real-time decisions is the best way to re-stock the shelves.

Cyndi Lago is Vice President at Capgemini Invent. She advises clients on supply-chain execution strategy and digital transformation. Connect with her on operations management, e-commerce, analytics, and strategic planning at cyndi.lago@capgemini.com.

Cynthia Fulk Lago

Expert in Big Data and Analytics, Supply Chain

I collaborate with clients to deliver solutions that enable higher margins, better customer service levels, and reduction in inventory. I am recognized by my clients for my ability to deliver innovative, cost-effective solutions and transformations and guide teams that provide leading practices.