The Future-Ready Supply Chain

Many in the business world are hoping that after the peak in COVID-19 cases well subsides they can, “go back to normal”. If they mean a new normal, great! If they truly believe business will resume as it was before the pandemic, they are in for a real wake-up call. Expectations from clients have already shifted, how people and businesses spend their dollars is forecast to change dramatically, and the supply chain is a big part of what is expected to be future-ready for those prepping to turn the lights back on for their constituents.

So how should companies be thinking about what it means to make their supply chains future-ready? It would be prudent to plan for fewer people involved in the supply chain, a lot more scanning via automation (think IoT and RFID), and greater efficiencies in how orders are taken and fulfilled. The subsequent distribution process is going to become a lot more digital because of policies such as social distancing and a whole lot more ‘re-shoring’ is likely going to be a requirement. Managing a complex supply chain globally is hard enough in normal conditions. Compound those requirements with a new environment where contamination can happen anywhere in the chain by one person which can affect hundreds downstream. This means that proximity management, as it pertains to the safety of products, just became one of, if not the most important of considerations when designing a future-ready supply chain.

What do we mean by that? Simply put, taking the complexity of ‘distance management’ in your current supply chain out of the equation as much as possible. Let’s create a real-world supply chain scenario that relies on several locations globally and assume for a moment you currently use them all for the production of IoT thermostats. In this example, integrated circuits are sourced in China and relays and diodes in Vietnam. All these components are used to produce IoT devices that are designed and assembled in Germany, which are then branded and subsequently sold in the US, in warehouses in New Jersey and California. These are a lot of steps for one IoT device to pass through, not to mention all the retail outlets and e-commerce fulfillment centers it then has to go through in order to get distributed and sold. Let’s also assume you are not large enough to own the entire supply chain yourself, which is the vast majority of businesses. How do you get future-ready?

Onshoring assembly and manufacturing is a first big step in solving the proximity issue and takes an entire series of supply chain requirements and costs out of the equation. Advances in IoT and RFID technologies have also come a long way in making onshore vs overseas manufacturing almost on par in producing many types of products. COVID-19 will make it harder in many ways for people to be as hands-on as they have been in supply chains; time is the other big reason to go onshore. It is undoubtedly faster and more efficient if more of the supply chain processes are domestic, local, or hyper-local if possible. As we know, time is money. When you look at the growing trend around immediacy in e-commerce, it also starts to become apparent that if your product takes even a few days longer to arrive; customers or partners will find others who can keep up with the demand for speed.

Using RFID technology in combination with IoT sensors can help alleviate labor cost hurdles when standing up manufacturing operations onshore and enable faster production. Pair those technologies with RFIDglobal’s Visi-Trac Asset Manager and you not only solve a significant portion of the proximity problem, but you will get an immediate enterprise-wide view of your production and a safer, future-ready supply chain.