Procurement teams all over the world are struggling hard to deal with the coronavirus pandemic. Most of them are trying to cope with global response measures and working diligently to secure and deliver all essential materials while protecting their supply lines. However, due to the condition of lockdown in different countries, operators are finding it difficult to maintain trade and movement of products across borders. As a result, the Australian logistics sector is suffering from huge disruptions caused by the pandemic and a restriction of movment due to government intervention and regulation. The impact of the crisis is hitting companies with full force.
It is worth noting that a number of Australian companies have invested in supply chain mapping before the pandemic even hit, making them now better equipped to handle the pandemic at hand. These Aussie companies have developed better strategies to handle the current logistics crisis, and have maintained their supply chains during this challenging time. Instead of operating out of panic, these Aussie companies have collected data and key information about how to respond during a pandemic and better understand how suppliers, and producers are at risk and how to operate in response to these situations. With this preparation, these operators are finding themselves ready to secure alternative supplies, due to the power of effective risk management.
Although many disasters have rattled numerous business sectors in the past few years, including earthquakes, tsunami, volcanic erruptions, floods, and of course the devastating fires that shook Australia to it’s core, the Covid-19 has added further pressure to our already environmentally strained planet. A survey was carried out on almost 300 respondents in early February, right when the coronavirus outbreak was reported in China, which outlined that many Australian supply chain operators were still in the ‘assessment phase’ of identifying the risk Covid-19 could pose to their businesses, and didn’t respond with an emergency plan in timely mannor, which inevitably put greater pressure on the Australian logistics industry. If more companies had emergency supply chain mapping in place, perhaps things could have run smoother for more logistics companies.
The required resources for network mapping are getting expensive:
Many leaders these days are talking about the need for supply network mapping in Australia. It is one of the most potential risk mitigation strategies. But they are not able to implement this strategy successfully due to lack of time and labor requirement. In a recent interview, a Japanese semiconductor manufacturer revealed that it took more than one year with 100 people to map the supply chain network of their company during the tsunami and earthquake crisis which hit Japan in 2011. Similar kinds of situations have emerged these days as well, and companies are finding it difficult to handle the panic associated with a sudden crisis such as Covid-19.
At the same time, most logistics companies in Australia rely on top tier human intelligence to decide about lower-tier suppliers. But when the roles change, people retire, or knowledge leaves them, the information collected from various sources remain anecdotal. With new employees taking up to several years to develop or redevelop healthy connections with immediate suppliers and their global networks.
Managing essential needs in the hour of crisis:
The economic impact of the pandemic has initiated a call for the logistics sector to step up and support and protect essential services around the globe. These supply chain leaders need to take proactive steps to deal with the immediate needs of the people while maintaining the health of their business. As demands are continuously changing in the social landscape, logistics companies need to position themselves to survive in this ‘new world’.
Many logistics companies in Australia have taken essential actions to deal with the surge in demand. They are looking for opportunities to maintain flexibility in the market while increasing the speed of product delivery. The primary trick they are following is bypassing distribution centers and shipping goods directly to the stores. This strategy helps operators to simplify the assortment process and packaging issues while avoiding the need for extra staff. The other important method to handle logistics in the covid-19 crisis is to supplement non-discretionary transportation capacity with the help of key partnerships.
Here are a few highlights from Australia’s logisitics operations:
Australian operators are now trying to improve focus on labor planning because emergency demands in the logistics sector are rapidly rising, but the workforce is currently to small to service the demand.
- They are giving more attention to the tier 1 supplier risk so that demands can be fulfilled without any trouble.
- Many operators are strained due to the impact of an indefinite lockdown, with companies now looking for new sources of supply to maintain rising market demands.
- Planning parameters and inventory policies are being improved to ensure the proper flow of supplies.
- Some companies are working on enhancement of inbound materials; however, others are also preparing for plant/ warehouse closures.
The professionals in the supply chain or logistics sector need to optimize their plans to handle reduced inventories and to drive up asset utilization. They are also making efforts to remove buffers while enhancing flexibility so that disruptions can be absorbed.
There is no doubt that many companies are still not prepared to handle the global shock presented by this pandemic. Logisitics businesses are advised to consider implementing the latest warehouse software tools. It is important to follow a proactive approach to track your shipments and maintain a track of inventory. This approach can help logistics companies better to deal with the uncertainties in the market. The creative involvement of the latest technologies such as artificial intelligence, IoT, and 5G can help the industries to regrow after this Covid-19 shock. Until then, they need to follow adequate procedures to track demands and supplies with advanced software tools. Warehouse management software can undoubtedly support the supply chain while dealing with imbalanced demands in the market.