Data Systems International (DSI®) on Adapting Supply Chains During COVID-19

supply chains

Data Systems International® (DSI), an industry leader in supply chain software, works diligently to provide strategic advice for companies on how to adapt to changes and resolve issues that disrupted supply chains across the globe due to COVID-19 complications.

The Institute for Supply Management (ISM) published a survey in March, 2020 compiling feedback from US companies (55%manufacturing & 45% non-manufacturing) regarding the impact of COVID-19 on their supply chains. More than 80% of respondents to the survey initially claimed they encountered disruptions in their supply chains, though an updated report cited 95% of participants had encountered disruptions. According to James Spivey, DSI’s RVP of US Sales East, supply chain health can be measured by two key factors: 1) revenue and 2) capital expenditures (capex). Recently, companies have been predicting lower revenues by 20-30%, and companies are adjusting to lower capital expenditures due to the downturn in revenues.

The month of March 2020 was telling for supply chains, and by April almost every phase of supply chains around the globe were impacted. Some companies reacted quicker than others, including distilleries which were able to pivot from making spirits to producing hand sanitizers within a week. This adaptation was able to fill a need for a market struggling to meet customer demand, and was also importantly able to provide essential products to first responders. Through the resource of e-commerce, this adaptation also allowed the distilleries to distribute their products via partnerships with local stores or directly to customers (by way of curbside pickup).

With the expected decreases in revenues across the high majority of industries, it is noteworthy to mention that some sectors including food, beverage, and tobacco manufacturing expect to see an increase in revenues. The expectation for revenue boosts is primarily centered around markets in the United States where the vast majority of the supply is produced. However, due to the pandemic, sectors where manufacturing is not occurring in the U.S. has caused “normal” lead times to go up 200%, which will have a disruptive impact on the U.S. supply chain and manufacturing sectors. According to Spivey, another adaptation U.S. companies will employ to reduce their risk will be to begin the process of bringing manufacturing back to the U.S., which will increase supply chain strength greatly. He notes the repatriation of manufacturing will occur globally as foreign manufacturers have proven to be risky and unreliable during the coronavirus pandemic. Many companies will turn to supply chain technologies like DSI’s Cloud Inventory® to increase the adaptability of their supply chains.

This worldwide disruption brings to light an opportunity for companies to examine where inefficiencies and challenges exist in their supply chains, and find new solutions to effect positive change. DSI’s Cloud Inventory provides solutions for addressing the four core areas of the supply chain which includes: 1) Productivity; 2) Compliance; 3) Inventory Optimization; 4) Revenue Generation. Additionally, the Cloud Inventory platform allows companies to integrate with multiple systems, vendors, and customers, providing critical supply chain visibility. When visibility is maximized, supply chains are better able to adapt to unexpected scenarios such as a pandemic.

1. Productivity

In terms of productivity, companies must digitize their inventory information and leave paper processes behind. Most manual processes which exist today provide little visibility, and siloed systems with no external integration come up short when providing complete visibility that is necessary to properly manage supply chains. DSI solutions provide workers with real-time information for capturing and reporting, can validate when work is completed efficiently, and eliminate time-consuming mistakes that result from paper or manual processes. DSI’s platform enables the work force with automated tools which companies will realize have several productivity benefits including lower operating expenses (less labor required for the same output), general efficiency, and happier customers as a result of less errors and faster shipments.

2. Compliance

When companies invest in compliance and their access to important data, it is paramount that the information is secure and private. According to DSI’s James Spivey, “Blockchain will continue to gain speed in a post-COVID-19 world. Leveraging secure solutions to track data will be key to achieving compliance.” As products move through supply chains, key data is captured, and updates to blockchain technologies occur to ensure a complete chain of custody. DSI’s compliance solution uses a partnership with DocuSign to ensure suppliers and vendors are meeting contracted SLA’s, which can be validated in real time against original contracts.

3. Inventory Optimization

The most successful supply chains have efficient inventory optimization. Information within the supply chain must be as real-time and accurate as possible and captured whether it is inside or outside of the warehouse walls. Implementing automation with regard to collection of data at the point of execution is key to reacting to changes, and digitizing information is vital. Digitizing a supply chain and its activities provides data points that can create a digital twin of the supply chain. This allows analysis to occur to identify bottlenecks through Business Intelligence tools which allow for quicker identification and remedy of problems. Real-time supply chain information also means having the correct amount of inventory in the correct location at the correct time and reducing stock-out impact. Having accurate information on-hand will empower field employees to get the job done faster, as well as empower the back office to make key business decisions that will optimize the movement of inventory and productivity.

4. Revenue Generation

To survive and thrive in future supply chain disruptions, the need to digitize supply chains has never been greater for companies. Once organizations implement solutions that enable real-time visibility and better fulfillment processes, their entire supply chain will be better optimized and therefore more profitable. Increased revenue will arise from reduced labor costs, reduced carrying costs for inventory due to better tracking of inventory, reduced handling costs, and eliminating manual data capture, entry, and unnecessary touchpoints. Investments in supply chain tools have a proven ROI record and have repeatedly shown to increase cash flow. Not only will investing in supply chain management platforms like DSI’s Cloud Inventory help a company to become more profitable, it will also ensure a company is set up to be flexible enough to adapt to inevitable future supply chain disruptions like the world has been experiencing throughout the COVID-19 pandemic.

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