Logistics aims to achieve seamless connectivity between constituent processes. Supply Chain Processes have always been labor-intensive, especially in inventory management (handling, inspection), production, and shipping. However, as social distancing has become the norm due to the current pandemic, businesses have been forced to reevaluate their processes to adapt.
Effect of Restrictions on Supply of Goods
As social distancing becomes the new norm, warehouses take a major hit in inventory. Staffing restrictions have reduced the amount of inventory that can be handled at any given point in time. This has reduced the amount of material moving out of warehouses and into production lines, inadvertently causing delays in fulfilling orders. Delayed orders are further exacerbated by shipping delays due to restrictions placed on the movement of goods and transport. This causes supply to further be pushed back, causing a rise in prices. As prices rise, demand for the goods is affected, thus, inadvertently affecting demand planning that businesses may have done. The current pandemic has been one that has hit companies out of the blue and has crippled many small businesses.
Building a Business Ecosystem
The supply chain has benefitted from advances in technology. By opening up distribution, wholesale and retail markets, connecting them has been effective in reducing costs. This has allowed for the integration of business processes. No more are manufacturing, distribution, and markets separate entities. Rather, each of these is integrated into the supply chain.
Technologies such as the internet of things and computer vision have given way to automated manufacturing and computer-based inspection processes. This system allows for lower staffing at any production line, greater control over manufacturing and inventory, brings down administrative delays, and prevents compromises in business processes. Even in the event of a compromise, a technological system can sift through process logs and establish a cause for such compromise. Moreover, distribution networks and retail benefit from such partnerships by instantly regulating supply in the wake of any assignable cause for a reduction in demand.
As supply chain models increasingly become collaborative, forming strategic supplier partnerships, markets ultimately improve, with newer suppliers joining in. Recognizing the shift to manufacturing in India and schemes such as Make in India, there is ample scope for manufacturers to restructure their processes and adopt increasingly collaborative ecosystems.
Digital Infrastructure for a Hyper-Collaborative Environment
The advantage of building a digital ecosystem is that it does not require a complete restructuring of business processes, rather, it acts as an extension to existing infrastructure, allowing for comprehensive cloud monitoring and control. This enables businesses to interface with each other and seamlessly make an integrated supply chain, all the way downstream from the manufacturer to the market. This monitoring is effectively real-time, allowing for greater flexibility and control in all processes. This way, human interaction is reduced and cost savings can occur due to a reduction in administrative processes and management.
Adapting to Government Regulations
The current situation has seen government regulations related to travel and staffing change over the months, to take steps to allow for social distancing. Changes have been made to the documentation and approval process for carrying out business. This affects production since such processes have been established in keeping with policies that were mostly offline or paper-based.
With the advent of digital solutions to verification, approvals, and transactions, requisite reports and documents can be printed instantaneously at any location. This allows any stakeholder in the business access to such documents, should they need to evaluate the current status and make critical business decisions. Important documents, such as e-passes, shipping orders, and approval certificates can be accessed instantly, which can be shown for verification purposes and these can be digitally signed as proof of authenticity.
How Online Documentation can Push for Better Communication
As documents can be accessed online by all stakeholders, there is no hassle of archives and no need for staffing for organization and retrieval of data. This push for access to online documents also means that the system is much more secure since encryption helps for unauthorized access. This is especially relevant for manufacturing sectors that have gone digital and use IOT based processes for control. Any unauthorized change in databases may cause severe production inconsistencies and cripple businesses. Also, in the transport sector, government documents can be evaluated at a distance and can be shared using systems like near field communication. This is similar to systems like FasTag, where RFID chips are used to determine access control at checkpoints.
The Move to a Transparent and Open Market- A Hyper-Collaborative Business Model
Supply chain processes have integrated process planning and manufacturing operations. The move to a digital ecosystem can benefit businesses that rely on manual processes for inventory, distribution, and transport. The current pandemic may have caused tighter restrictions on the movement of goods and preventive measures like social distancing may mean fewer persons in factories. With the right technological infrastructure, businesses can remotely control their processes. By integrating their processes to the cloud, they benefit from the real-time feedback and control. By moving distribution and markets to a digital model, businesses benefit from increased transparency and can compete better in the market.
These measures ultimately benefit all the stakeholders, right from the supplier to retailers and finally the consumers, who can get a wider variety of products and can benefit from increased competition.