The Corona opportunity
Slowly ‘coming out’, but to what Brave New World? Lockdown-learning has fuelled change. But will we wear a blindfold instead of a face mask? What changes and opportunities will last and be grasped?
WORKING FROM home (WFM) has been effective, but two months of remote meetings resulted in a need for social without the distancing. We learned that people are disciplined with less supervision – self-managing their time and tasks to fit personal chores in too. In future, the WFH fortunate will add visits to the ofice as well. Manufacturing planning and scheduling, inventory management, financial administration and other roles can be location independent, bringing implications for systems access.
Work and the work environment
With WFH, ofice jobs and meetings can be more effective – there is often less ofice coffee chat, “have-you-got-a-minute” interruptions and driving. We have become used to social distancing, we are hygiene-aware and focused on the task at hand.
Projects have become smaller or split into parts, spreading cash flow and risk. This will continue as operating costs are kept under control – so less flying or driving to customers, releasing valuable time. Face-to-face meeting agendas will change, bringing change to negotiations and relationships and how we touch base and share general updates.
Supply chains have changed for ever
Covid-19 has driven faster response to change – separating winners from the also-rans. The future needs predictive and rapid re-planning, more effective sourcing matched to better service from less inventory investment, with shorter supply lead times, working within your supply chain to inshore critical imports with local suppliers.
Enterprise resource planning (ERP) systems can no longer just do the basics, they need to enable more supply chain collaboration driven by end-consumer visibility, optimised sales fulfilment, appropriate stock mix, faster automated processes enabling a response to the radical demand change and disruptions we have experienced.
Lockdown shopping habits have propagated huge upstream supply chain whiplash against planned product flow. Take the Hyperstore-retailer/ consumer packaged goods (CPG) supply chain – it was open, but was it easy for them?
High earners have been demanding more immune system boosting food and drinks.
Lower earners are seeking high nutrition but affordable foods, like oranges and sweet potatoes.
Consumers started ‘shopping down’, buying less non-essential items, buying cheaper brands, with fewer shopping-trips. Wednesday became the new Saturday to miss the crowds. Consumer behaviour changed.
Not selling high-margin products – general merchandise, alcohol and cigarettes – so per- shopper trip revenue reduced, while logistics costs increased.
Replenishment is the constraint/focus. There is pressure to sell off overstocks while increasing urgent supplier/manufacturer replenishment reaction speed. There has been rescheduling of delivery days – moving stock sitting in the wrong regions.
There has been a 150 percent a day increase in e-commerce orders, with substitution of preferred- brands to deliver something.
In many industries this will become the new normal – forcing IT to deliver on its promise, achieve effectiveness and release innovation.
Supply chain differentiation is pushing companies to mature their use of more sophisticated and relevant IT modules and enablers. They need to make the best use of planning tools like material requirements planning (MRP) and inventory optimisation (IO) driven by demand forecasting, so supply matches demand, replenishment matches frequency and the size of orders/delivery. Streamlining procurement improves sourcing decisions and supplier relationships/priorities.
South African individuals and companies experienced uncomfortable changes during lockdown, but we responded quite fast to constraints – some instant learning fuelled survival.
The future isn’t certain, but we can certainly see new challenges to overcome together… the “Corona Opportunities” – let’s not waste them.