As the impact of the COVID-19 pandemic continues to be felt around the world, more areas of daily life have been affected. One of the most visible ways is when consumers shop for essential goods at grocery stores or other businesses, since high demand for some items has created temporary supply chain shortages. To keep problems such as this to a minimum, the logistics industry has had to quickly adapt to changing conditions on an almost daily basis. Since the supply chain is made up of numerous parts, here are a few ways the logistics industry has worked to ensure all goes well.
Crisis Management Plans
With the impact of COVID-19 being extremely serious, most companies within the logistics industry have placed a far greater emphasis on creating, updating, and maintaining flexibility with their crisis management plans. While most companies already had these types of plans in place well before the onset of COVID-19, the pandemic has created a situation where companies are implementing updated technology and other methods to monitor factory production levels, supply and demand within stores, and other areas critical to supply chain management.
For many logistics companies, one of the best ways to beat COVID-19 is dual sourcing. Using this technique, companies can halt or avoid supply chain interruptions by partnering with two or more different manufacturers, multiple U.S. transport carriers, or overseas carriers and manufacturers to keep essential goods moving through the supply chain. By doing so, they can react far quicker to interruptions within the supply chain, lessening the risk of shortages for consumers.
Though face-to-face meetings may not currently be an option at most companies within the logistics industry, constant communication is still seen as a vital part of keeping things moving smoothly during COVID-19. Throughout all aspects of the supply chain, communicating through emails, text messages, online sites such as Zoom or Skype, and even phone calls can allow personnel to identify critical points within distribution chains that may be at a breaking point and make quick changes.
Negotiating Lower Rates
As anyone who understands supply and demand knows all too well, prices can quickly rise when demand outpaces supply. To keep this from happening, many logistics companies have made attempts to negotiate lower rates with carriers as COVID-19 has spread. By doing so, companies can make sure their cargo does not get bumped off ships or planes in favor of other cargo for larger companies.
While public health experts constantly use various modeling plans and statistical analysis to determine how many COVID-19 infections or deaths may take place in certain areas, many logistics companies are now doing the same to determine where potential problems may surface within supply chains. By using these methods, companies can implement this into their crisis management plan in an effort to be well-prepared for various scenarios. Through the use of computer simulations, logistics companies can learn not only how certain scenarios may play out, but also examine ways to improve and strengthen certain procedures.
OTIF Delivery Metric
Since food manufacturers place great emphasis on the OTIF delivery metric, logistics companies are working with these manufacturers to ensure shipments arrive to stores on-time and in the quantity requested. Otherwise, on-time and in-full (OTIF) fees kick in and severely cut into a company’s profits. For example, research has discovered 25% of deliveries arrive at least two hours prior to their scheduled delivery time. While this sounds good, the reality is that it disrupts distribution center operations, ultimately creating delays within the supply chain. By implementing various techniques to ensure deliveries and shipments are timed more efficiently, COVID-19 can produce far fewer delays and shortages.
While the COVID-19 pandemic will eventually come to an end, it is critical that companies continually plan for whatever may be ahead in the coming months. By using technology, experience, and innovation, the pandemic’s impact can be greatly minimized.