The rapid spread of COVID-19 has forced governments to institute stay-at-home and social distancing rules and order complete lockdowns and store closures. These have not only disrupted businesses but have also halted many of them for months. Consequently, the resulting revenue drop and labor shortages have plummeted production and the availability of products.
According to a survey by Dun & Bradstreet, 938 of the Fortune 1000 companies have a tier-1 or tier-2 supplier that has been affected by the virus. Therefore, now is the time for business leaders to rethink their supply chain strategies and ensure product availability at all times.
In today’s age of continuous disruptions, which is further exacerbated by the worst economic downturn since the Great Depression, businesses are struggling is an understatement. Simply put, they are unable to give the consumers what they want, and when they want it. As a result, they are hemorrhaging revenues and losing market share, both of which can be safely attributed to the failures of their supply chains. Therefore, understanding the factors influencing this supply chain under-performance is vital.
In light of the health and safety concerns due to the current pandemic, traditional sales have shifted from physical to digital in most of the industries. Many buyers were already using digital media to research and buy products as well as avail services, the pandemic has nudged them to increasingly adopt digital media to make more purchases and avoid risking exposure to the virus. This channel shift has had a huge impact on consumer preferences. They expect improved digital customer experience and that includes ease, convenience, personalization, and quality.
However, with global production and supply chains stifled, businesses are struggling to ensure the availability of their products. This simply translates to not being able to satisfy the increasing consumer demands leading to not only decreased revenue but also losing consumers to competitors. This highlights the need for resilient and flexible supply chain strategies to prepare for unprecedented times like these.
The COVID-19 pandemic has brought about a huge shift in consumer buying habits. As discussed above, their mindsets and choices have undergone a seismic shift. These new consumers are capricious and less loyal, prefer experiences over products, and are more time-conscious than ever before. Therefore, businesses must be empowered to quickly respond to volatile demands – because if they don’t, their competitors will.
However, in the current pandemic, tracking, assessing, and responding to these ever-changing demands is highly complex. Businesses are left scrambling to work out the right course of action based on inaccurate data, limited collaboration, and little to no understanding of the associated risks on their businesses. Therefore, businesses are in dire need of a platform that can ensure high product visibility and provide data-driven insights to make quick and smart decisions.
Businesses conducting their supply chain operations using traditional processes are at huge risk because these processes are time-consuming, labor-intensive, and expensive. As a result, even slight disruptions, such as the current pandemic, have devastating implications in the form of product unavailability, human errors, and strategic inflexibility.
Since the global lockdowns, despite massive investments into digitalization and modernization of traditional supply chain processes, many businesses have been unable to ensure product availability, to the detriment of their revenues. This is largely due to poor data management, which unsurprisingly, has led to poor decision-making. Therefore, businesses require a central platform that can enable them to capture data in real-time and provide relevant analytics that can enable the realignment of supply chain processes in real-time, ensuring high product availability.
To thrive in the new normal, we need tools that not only understand and track the ever-shifting consumer demands but also quickly determine alternative courses of action to automatically realign supply chains and avoid inventory surplus or product shortages. At Acuvate, we have built Supply Chain Analytics as the one-stop solution to ensuring maximum product availability.
Analytics can empower employees with real-time, data-centric insights, leading to improved decision-making and a resilient supply chain. It enhances anticipation, enabling businesses to accurately identify items that require urgent attention. For instance, the delivery of certain products to a geographical region can be expedited because of the unavailability of the competitor’s products.
Following are two use cases of supply chain analytics:
Since the COVID-19 disruption has affected different regions in different ways, the need for localized and real-time forecasting is critical to ensure a stronger market position. Therefore, businesses will have to completely transform their forecasting approach because of the permanent shift in consumer behavior or obsoleteness of their historical data.
Below are a couple of approaches we have taken based on dataset availability to help our customer deal with past data losing relevance.
Our Supply Chain Analytics integrates data from various data sources, such as COVID Datasets from John Hopkins or Stringency data in the UK, Benchmark data such as IRI, POS, social media, past sales, competitor data, events, etc., and harnesses it with machine learning and AI for highly accurate demand forecasting. This prevents lost sales due to out-of-stock situations, resulting in both higher revenues and satisfied consumers. The key factor taken into consideration is being agile in coming up with the best possible forecast and iterating rapidly to get a true sense of demand to respond appropriately since time is key during this time.
Learn More: Demand Forecasting Systems For CPG
In the wake of the current global environment, businesses have realized that they need complete visibility into the availability of products in their warehouses and stores to better anticipate and analyze their financial performance and make better strategic decisions.
Supply chain analytics enables businesses to build an AI-powered Out of Stock Dashboard that focuses on your most profitable SKU’s in terms of Total Dollar Value Impact and triage the root cause for products going out of stock and fix the situation. They help us identify what are the parameters which impact out of stock of a particular category of an Item or specific logistics provider or the item going out of stock on a particular day due to the item being in transit . This allows the planning team to plan better and fix these issues by having remedial measures such as better truck planning schedule for that customer.
In these times of uncertainty, suppliers have got impacted due to the pandemic and government regulations are changing faster than ever before and that is impacting the manufacturing capabilities of different items all over the world. Small suppliers are the first to face the brunt of these changes in regulations and demand. Supply chain analytics can help you to map your entire supply chain and monitor the suppliers’ risk and give actionable insights during this new normal.
The new normal is here to stay for the foreseeable future and the pandemic was a wakeup call to all business leaders to put in practice a crisis response strategy which has always been the talk of board room and strategy discussions. Reputations of being a supply chain leader in their respective space did not protect them from the pandemic. In a world as globalized as ours, the next disruption is always around the corner. Therefore, it is imperative that business leaders make timely decisions to build greater supply chain resilience, sustain critical operations, and ensure product availability at all times. Only then, they would be able to navigate disruptions and adapt to changing markets and business dynamics.
Please feel free to get in touch with our experts and learn more about how Supply Chain Analytics can help you gain data-driven insights, forecast Sales, optimize pricing, and improve operational efficiency & effectiveness.