When the pandemic hit, businesses faced a crucial decision: To take defeat or to rise to the challenge. With demand for products and services either stalling or sky rocketing, supply chains went into crisis mode, and remain there. Companies that had already gone through digital transformation, have survived or even grown during the pandemic. While others had to fast track digital transformation as a means of survival. Their stories and learnings are both enlightening and motivating.

How companies reacted to the pandemic-induced crisis determined their continuity.

     

  • Many companies reacted to the challenges generated by the pandemic accelerating digitalization by as much as 3 or 4 years. This included their channels of interaction with customers and supply their chain.
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  • A Gartner 2020 survey with board of directors showed over 69% of leaders said social and economic disruption accelerated digital business initiatives. They also expressed their companies changed more in the first months of pandemic than they had in the last decade.
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  • “As traditional retail channels weakened, iconic brands, including Nike, added or expanded their online direct-to-consumer sales. Nike’s digital sales grew 79% after its brick-and-mortar stores shuttered in 2020”. Harvard Business Review

But there’s still a long way to go.

  • Even with the accelerated digital transformation, companies still have a long way to go. A Harvard Business Review study showed more than 72% of companies believed their key supply chain capabilities are digitally immature. These capabilities include supply planning, demand planning, supplier risk management, warehousing and logistics, procurement, and inventory management.

Lessons learned during the pandemic for Supply Chain Digital Transformation.

  • “Supply chain digital transformation is proven to drive growth, mitigate risk, and optimize costs. However, it requires a strong alignment between business and supply chain strategy to succeed”. Gartner
    • Companies must invest not only in Visibility, but also Planning, and Collaboration.
         
      • Digital supply chain planning requires different capabilities versus traditional planning. Like technical skills including advanced analytics, and behaviors/traits such as adaptability and risk taking.
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      • Collaboration needs to take place across different business functions within the company, and also and outside.
  • But there must also be investment in employee training, so the teams become more tech savvy and embrace digital transformation.

    Business as usual disruptions.

    Disruptions like the pandemic are no longer one off, unpredictable events. Threats of natural disasters, political unrest, economic crises, and pandemics seem to be part of our new normal. So, businesses must make these events part of their scenario planning, and build the capabilities to face disruptions.

    Organizations with strong digital capabilities in place before the pandemic, were better able to manage the disruption than the rest. These were the agile, resilient companies that set the example and make the case for supply chain digital transformation.

    We at Estafeta USA continue to work with our customers in ways we can collaborate in making their supply chains stronger and more resilient. We’d love to hear your thoughts, please contact us and let us know about your own experiences.