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The Evolution of Supply Chain

by Kelsey Winick
optimize supply chains

The COVID-19 pandemic has put the focus light on problems the domestic supply chain. While these may seem like new issues, companies have been looking at their supply chains and figuring out ways to improve even before the pandemic. An example of this can be seen with the rise of e-commerce and figuring out ways to optimize supply chains with regard to production speed and sourcing.

RISK TO SUPPLY CHAINS FROM CLIMATE DISRUPTION A BIGGER ISSUE THAN COVID-19

DHL and McKinsey have conducted extensive research into shifts in the supply chain. The research looked into not only the effects caused by the pandemic but also issues from before COVID-19 began. A key differentiator between pre-coronavirus and post-coronavirus is a “stronger emphasis on supply chain resilience, [rather than a] focus on cost.” In the studies, “both DHL and McKinsey make clear that the transformation of supply chain strategy pre-dates the advent of the pandemic.” With supply chains, “US government officials have stressed their desire to eliminate a strategic vulnerability from over dependence on individual countries for products or raw materials,” as well as focusing on near-shoring or on-shoring production.

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THE SAFER WORKPLACE: REOPENING FACTORIES, DISTRIBUTION CENTERS AND STORES

Since the COVID-19 pandemic began, businesses have been trying to figure out ways to open again, while keep customers and employees safe. Some businesses have thrived off the remote work environment, but many manufacturers have suffered. Several manufacturers require the use of operators onsite to maneuver “five-ton jigs and robotic welders” along with other devices within their warehouses. In speaking with other manufacturers, retailers, and other companies, many manufacturers are finding a way “to reopen in a safe, socially responsible fashion.”

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THE INCREASINGLY USELESS MIDDLEMAN

Retailers have had to reexamine their business and how they operate in the word because of the pandemic. But, even before COVID-19, retail companies had evolved because of e-commerce. While retailers have traditionally been a ‘middleman’, more companies have embraced e-commerce and shifted to a direct to consumer approach. Even though, “traditional wholesale will not go away completely, the pressure for the middlemen to demonstrate more value [will become more] intense.”

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