COVID-19 and the Supply Chain: What Can You Expect?

Over the past few years we have seen immense growth in e-commerce. The necessity for people to have goods delivered to their homes because of quarantine restrictions because of COVID-19 pandemic is going to take the demand for e-commerce to unprecedented levels. With this growth in e-commerce, distributors and retailers alike will need to react. The cost of labor will be high, not to mention the administrative burden of onboarding, training and staffing facilities when labor shortage is currently such an issue in the material handling industry.

For obvious reasons, China has been hit hardest. Chinese manufacturing has subsequently suffered severely, causing shortages while demand for some of those products is increasing. The backlash caused by this large amount of delayed inventory being rushed through supply chains as manufacturing in China picks up again will put extreme amounts of stress on already maxed out supply chains. Distributors who aren’t preparing for this now may not have time to react once it starts to hit.

Many experts are predicting this pandemic will fundamentally change customer buying habits. People who have never shopped online before are forced to start, opening up e-commerce as a buying route for a new segment of the population. Additionally, buy online pick-up in store service as well as buy online deliver from store channels could see a massive spike throughout the remainder of the pandemic. Customers who use this new method of goods delivery will most likely continue to use the service. As such, distributors and retailers will need to scale up their capacity for these options.

So, what does this pandemic and the changing buying habits of customers mean for your supply chain and material handling capacity in the long term? The most basic strategy you can take to deal with the long-term effects of this crisis is to consider moving to an omnichannel or localized fulfillment strategy and leveraging automation to increase your throughput. It would be very difficult to navigate the new order fulfillment landscape without automation in light of the increasing demands of consumers and the labor shortages facing the material handling industry. This might include things like robotic palletizing and depalletizing, automated storage and retrieval systems or automated guided vehicles.