Supply Chain Disruption and Changing Consumer Behavior in the Age of COVID-19
Responding to COVID-19 supply chain disruptions requires agility, re-learning consumer behavior, and adapting your supply chain.
Global movement has dramatically decreased in response to the COVID-19 pandemic. Stores are selling out of toilet paper and hand sanitizer, and demand for essentials like food and water is skyrocketing. Industries around the world are facing immediate supply chain issues as stay-at-home measures are set in place and manufacturing decreases.
Now more than ever we’re seeing how supply chain disruptions have a dire impact on maintaining a functional society. If you manage production or distribution for a business, you’re likely wondering how you can manage the stressors to your own supply chain that COVID-19 has caused. So let’s tackle some big supply chain management issues you might be facing in these uncertain times and explore how to prepare for the future using lessons learned so far as we adapt to a new normal.
Surviving COVID-19 Supply Chain Disruptions and Re-Learning Consumer Behavior
Everyone is acting differently now, and looking at supply chains, many elements are experiencing immediate shifts, including:
- Materials: Backed up hubs in impacted areas and facility closures to stop viral spread create shortages of materials.
- Reduced labor: Quarantine guidelines, enhanced safety measures, and illness affect the amount of people able to physically keep supply chains moving. To make sure your warehouse is following appropriate safety measures, stay up to date with CDC guidelines and ensure your facility is kept clean.
- Sourcing: With areas being impacted in various ways, new sources may be required but hindered by inventory availability and capacity to produce.
- Logistics: Established hubs and supply networks are no longer operating as usual. Items can get stuck, and many people may be looking for the same alternative means of transportation.
- Consumers: Behavior is changing as new purchasing habits emerge and online sales are skyrocketing as brick and mortars stay closed. Non-essential goods such as baking mixes and nail polish, for example, have seen online purchases increase by more than 300% compared to the previous year.
We’re also seeing big changes to how food is produced, distributed, and sold. Grocery stores are experiencing up to 15.9% revenue increase over the last sixty days. The movement of food around the country has become a strong focus for supply chain management as factories close, ports and hubs get crowded, and transit time frames lengthen.
Planning For the Short and Long Term
As data starts to unfold, tech companies, apparel businesses, and equipment manufacturers will likely face the most serious challenges, as they are typically reliant on China and Southeast Asia to keep things moving. With the unpredictability of the virus, it’s best to plan with the foresight of something happening again.
That level of planning is something Mothership has been helping customers with for years. It’s why one of our customers, Alanic Sportswear, significantly reduced on-demand shipping costs while still responding to increased sales and inquiries. Our platform empowers businesses like Alanic to adapt to the times by streamlining the quote and book process, eliminating the hassle of paperwork, and offering real-time shipment updates with the click of a button. With their extra bandwidth Alanic was able to optimize multiple areas of their supply chain while also adding value for their customers.
Responding to New Consumer Behavior
Consumer behavior will continue changing due to this pandemic, even after stay-at-home orders are lifted and people return to work. Adapting to the new climate of consumer behavior is key to managing a successful supply chain.
While the convenience of online purchase and on-demand delivery has been valued before, it’s now an essential for customers. Traditionally in-person experiences will need to be translated to digital platforms. And safety and security of packages as well as those working and delivering will become even more important. Businesses should expect to consider how their supply chain responds to these features, and how nimble it is to adapt as we all ride out the full impact of the virus. Businesses like Reebok have adapted by repurposing their manufacturing centers to produce face masks for protection. In contrast, sustainable clothing brand Reformation closed their factory doors and distribution centers temporarily and delayed online shipping times to keep workers safe until shelter-in-place orders are lifted.
Supply chain management thrives in preparing for these changes. Helping to achieve that flexibility has always been a tenet of how Mothership operates. Our tech platform allows businesses to respond and adapt faster when the unexpected occurs. Because we’re saving teams hours every week on quoting, booking, and tracking freight, the operational integrity of the business won’t be compromised with a leaner workforce.
Re-Thinking Future Supply Chain Management
With all the changes taking place, it’s important to upgrade your supply chain so your business can remain operational and profitable when the unexpected occurs. Diversifying your sourcing base increases agility and provides some pandemic immunity as the virus plays out in our communities.
So how does this affect predicting? It’s clear that order history is no longer going to be as good of a predictor of demand. All forms of traditional sales and marketing data may need to be re-evaluated as we gain a better understanding of changing consumer behavior.
We should expect new policies and regulation guidelines as government and organizations respond to shifting concerns. Agility is your friend now more than ever, and Mothership can help make your business faster and more resilient. And when we face challenges together, we build better ideas for the future. Schedule a demo with a Freight Specialist today to learn how we can help.