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Deloitte report outlines strategies for supply chains to thrive in post-Covid pandemic world

03/10/2021 By

The Covid pandemic has disrupted business and forced leaders to find new answers, like accelerating the adoption of digital supply chains. Now as the world begins a new era of the pandemic — the mass vaccination effort — it’s important to assess strategies that go beyond adoption. A new Deloitte report provides suggestions for how supply chains can thrive in the new environment.

The article is part of Deloitte’s “Respond, Recover, Thrive” supply chain series that examines how organizations can revisit supply chain strategy after figuring out all they have learned in light of the Covid pandemic. It aims to outline the priorities that organizations should and will take in the future to build sustainable, resilient supply chains.

“While the pandemic is still unfolding and its long-term effects are still unknown, what is clear is that the crisis seems to have helped accelerate fundamental shifts in what customers value, how customers buy, and how businesses need to operate differently to meet customer requirements and earn their trust and loyalty,” the report said.

Deloitte began the study by outlining four supply chain shifts that have or will take place:

  • Meeting evolving customer values and product and service requirements
  • Building trusted, connected supply networks
  • Designing supply chains that are optimized for cost, service and resilience
  • Enabling the future of work in supply chain management and operations

The Covid crisis changed the ways in which customers expect products and services to fit their desires. Now, people want instantaneous, on-demand pickup and delivery options. This will require supply chains to develop complex fulfillment networks or omnichannel approaches. Deloitte said this isn’t just for business-to-consumer companies either. It will be seen across B2C and B2B companies, and virtually no company will be immune.

Meanwhile, consumers are also expecting more in the form of corporate and social responsibility going forward.

“In a recent global survey, both millennials and Gen Z consumers said that they will make a special effort to support businesses — especially smaller local sellers — after the pandemic, and they won’t hesitate to avoid companies whose stated and practiced values don’t match their own values,” the article said.

“Further, a 2020 study by the Manufacturer’s Alliance for Productivity and Innovation found that 74% of manufacturers expected that reporting on environmental, social and governance (ESG) goals would become table stakes as early as within a year. Organizations’ ability to provide proof of execution against these commitments might become a requirement. This would reshape and reinforce the need for transparency — and redefine what trust and sustainability mean in a supply chain.”

Deloitte said that the growth and use of digital supply networks (DSNs) is part of the process as well. The DSN model includes breaking down functional silos to promote visibility across the organization between a company and all its stakeholders or suppliers. DSNs also are built to anticipate disruption and reconfigure themselves to mitigate risk across the extended partner ecosystem.

“The key to automated, predictive and prescriptive operations in the post–COVID-19 world lies in the interconnectivity of digital tools, physical infrastructure and their underlying data streams,” Deloitte said.

Deloitte explored the topic of near- or far-shoring suppliers, saying that in the future, it’s likely that the disruptions over the last year reinforce the need for both strategies. The key to thriving in the supply chain comes from the diversification of suppliers to ensure resiliency and reliability going forward.

The final major shift for the supply chain will come from its workforce, the workplace and the nature of work as a whole. People and companies are much more flexible than ever before. Work from home has been a success. More gig and contract workers are providing companies with quality talent.

While these trends were on the way already, the Covid crisis accelerated the pace at which work became flexible. It is now a place where people can make real suggestions and impart organizational change, from the comfort of their own home or even across the world.

Deloitte ended its report with three recommended steps to achieve a thriving supply chain:

  • Make the supply chain an integral part of corporate strategy
  • Lay the digital foundations to enable the corporate strategy
  • Identify what and who you’ll need to get it done

While Deloitte provides these four major shifts, it still acknowledged that it’s hard to predict the exact impact of Covid on supply chain resilience going forward. The world is still working through the pandemic. Adapting and thriving to the four shifts will take legitimate thought, analysis and long-term planning that won’t go away once most people have a vaccine.