In the first week weeks of 2020, the gen­er­al pub­lic did not give a lot of thought to the state of sup­ply chains. To many peo­ple, it was just an abstract con­cept that kept goods — and Ama­zon deliv­er­ies — flow­ing to where they need­ed to go. But, as COVID-19 swept across the globe, these lines were dis­rupt­ed to a degree nev­er seen before. Sud­den­ly, sup­ply chains were at the fore­front of people’s minds.

Unprece­dent­ed Sup­ply Chain Awareness

“Pri­or to the pan­dem­ic, I’m not sure a whole lot of peo­ple real­ly under­stood what sup­ply chains were,” said Abe Eshke­nazi, CEO of the Asso­ci­a­tion for Sup­ply Chain Man­age­ment. ​“Peo­ple did­n’t under­stand the mech­a­nisms nor the syn­chro­niza­tion required to deliv­er a prod­uct from a raw mate­r­i­al state all the way to the consumer.”

At this moment, sup­ply chains are at the fore­front of the minds of logis­tics pro­fes­sion­als and con­sumers alike. The dis­rup­tion caused by COVID-19 was a wake-up call. As the pan­dem­ic broke vital sup­ply chains around the world, com­pa­nies have tak­en steps to not only sur­vive the cur­rent cri­sis, but also to pre­pare for future black swan events. 

“All of these big com­pa­nies set up emer­gency com­mit­tees and have devel­oped their ini­tial COVID-19 response, but struc­tur­al sup­ply chain issues take time to resolve,” said Richard San­dall, chief sup­ply chain evan­ge­list at Inno­vapp­tive, a mobile sup­ply chain and plant main­te­nance solu­tion provider and SAP part­ner. ​“Sud­den­ly sup­ply chains are one of the most impor­tant issues that com­pa­nies need to address.”

A Dig­i­tal Bridge to Heal Sup­ply Chains

In order to keep prod­ucts flow­ing and projects on track, many com­pa­nies are reeval­u­at­ing their tech­nol­o­gy and soft­ware envi­ron­ments. Dig­i­tal solu­tions can make the process of main­tain­ing sup­ply chains, track­ing mate­ri­als, and mon­i­tor­ing prod­ucts both eas­i­er and safer.

“We’ll see a focus on dig­i­tal trans­for­ma­tion,” said Eshke­nazi. ​“Or we’ll see orga­ni­za­tions that have already invest­ed in dig­i­tal trans­for­ma­tion begin accel­er­at­ing and using this as an oppor­tu­ni­ty to dou­ble down on their dig­i­tal transformation.”

Over the past few months, we’ve seen tech­nol­o­gy com­pa­nies pitch­ing their soft­ware as solu­tions to any cur­rent or future sup­ply chain issues. Dur­ing SAP­PHIRE NOW, SAP con­sis­tent­ly made the case that its prod­ucts and intel­li­gent enter­prise can help com­pa­nies thrive dur­ing these dif­fi­cult times. The online con­fer­ence saw some new announce­ments, includ­ing expand­ed capa­bil­i­ties to SAP Data Ware­house Cloud. 

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Increas­ing Sup­ply Chain Agili­ty and Resiliency 

COVID-19 also has inspired orga­ni­za­tions to make their sup­ply chains more agile and resilient. Accord­ing to Eshke­nazi, orga­ni­za­tions have adopt­ed a ​“lean men­tal­i­ty” to their sup­ply chains that was harm­ful when the virus first broke.

“We were not as agile as we should have been,” he said. ​“I think this is one of the learn­ings we need to take away from this sit­u­a­tion: Effi­cien­cy at what costs?”

Accord­ing to Eshke­nazi, the lev­el of dis­rup­tion in sup­ply chains var­ied by indus­try. For exam­ple, the food indus­try expe­ri­enced some short­ages, while oth­er indus­tries were less affect­ed. These short­ages were due to the fact there were safe­ty con­cerns in the pro­duc­tion, trans­porta­tion, and con­sump­tion of some food prod­ucts, not an actu­al short­age of materials.

“Each indus­try has to assess what the impact of this dis­rup­tion was on them and their sup­pli­ers,” Eshke­nazi said. 

Mov­ing for­ward, sup­ply chains need to become more agile and resilient to large-scale events with the poten­tial to slow or stop the flow of mate­ri­als or goods. 

Eval­u­at­ing Sup­ply Chain Risk 

The past year has also inspired com­pa­nies to rethink the way they eval­u­ate the risk asso­ci­at­ed with their sup­ply chains.

“I think you’re going to see quite a bit more atten­tion paid to risk mit­i­ga­tion strat­e­gy that enables orga­ni­za­tions to respond to dif­fer­ent sit­u­a­tions to their ven­dors,” Eshke­nazi said. ​“This is where sup­ply chain pro­fes­sion­als need to embrace sce­nario planning.”

Eshke­nazi high­light­ed that sup­ply chain pro­fes­sion­als also need to pre­pare for var­i­ous the­o­ret­i­cal dis­rup­tions, under­stand how these dis­rup­tions will affect their com­pa­ny and its busi­ness, and eval­u­ate how to best source mate­ri­als dur­ing times of crisis.

“Under­stand­ing the risk you have in your sup­ply chains is vital,” said Chris Hay­don, pres­i­dent of SAP Pro­cure­ment Solu­tions. ​“These things are chang­ing every sin­gle day. A con­sis­tent look at those risks so you can have more real-time feed­back on what’s going on is important.”

Build­ing Bet­ter Sup­ply Chains 

COVID-19 has com­plete­ly changed the way pro­fes­sion­als eval­u­ate their sup­ply chains. The out­break posed a great threat to the lines used to trans­port vital prod­ucts and materials.

“This real­ly caught us off guard as an econ­o­my,” Eshke­nazi said. 

Yet this event has inspired com­pa­nies and their sup­ply chain pro­fes­sion­als to work on ways to main­tain, bol­ster, and — most impor­tant­ly — improve sup­ply chains so that when the next black swan event hap­pens, we’ll be ready.

Join ASUG on May 11 and 12 for ASUG Best Prac­tices: SAP for Sup­ply Chain. This vir­tu­al event will fea­ture cus­tomers, experts, and thought lead­ers dis­cussing how the last year has chal­lenged and changed sup­ply chains, and what tech­nolo­gies com­pa­nies are using to bol­ster their sup­ply chains. Reg­is­ter to attend now.