Last week, we joined the Financial Times for an insightful session on the world of retail and manufacturing and how COVID-19 will continue to affect the industries' supply chains.
With speakers including Mike Flewitt COO at McLaren and Katy George, senior partner at McKinsey & Company, here's what the panel discussed and considerations of how to future-proof your supply chain for the uncertain times ahead.
Predictability of supply and demand
COVID-19 presents the biggest challenge to supply chains globally in recent history. Not only has the supply chain experienced disruption, but there has also been an unpredictable and ever-changing shift in customer demand.
In the past, supply chains relied on a high degree of predictability. Seasonal patterns and trends would allow retailers to predict demand and plan accordingly. But now, manufacturers and retailers are looking towards the news and government guidelines to help redefine their strategy.
It’s not all doom and gloom and some sectors have seen a boom because of their focus on e-commerce or because their category has been in high demand in a locked-down world.
Mike Flewitt, COO at McLaren, predicts that their supply chains will become federated. Models will move from cost-first and instead, look for more reliable and locally-sourced solutions.
Dame Carolyn Fairbairn, director-general at CBI says manufacturing and construction have been hit the hardest. Food seems to be a success story as the industry works at 90% fulfilment, a testament to innovation within the industry.
Technology and big data
Katy George, senior partner at McKinsey & Company says when the economy opens up, we’ll see a ‘bullwhip’ effect across supply chains. The potential for ongoing fluctuations shines a light on the importance of technology that will allow effective inventory management.
Online sales will accelerate at a huge rate, technology will become more refined and it will be a bigger focus than ever, giving the industry a ramp-up in innovation.
If they haven’t already, companies should implement technology to track and create end-to-end visibility, track stock, transparency in the supply chain. This will be crucial going forward and will provide those who do with a competitive advantage. We will likely see enhanced innovation across the supply chain in the coming months as retailers and consumers adjust to an even more digital world.