Supply Chain Winners

The organizations whose supply chains were aggressive about pre-pandemic investments in the digital technologies that enable them to serve e-commerce customers prove to be the most successful at weathering the coronavirus storm.

By Carol Miller

Expectations were low among financial analysts in the summer of 2020. Just prior to the release of second quarter results from multiple companies, predictions were for record low revenues—particularly among retailers—thanks to the widespread shutdowns experienced worldwide in an attempt to staunch the spread of COVID-19.

And yet, the actual numbers shared by Walmart, Target, Amazon, Lowe’s and Home Depot handily beat Wall Street expectations by billions of dollars apiece. Instead of spending on travel, entertainment and dining out, Americans used that surplus cash to shop online. Trapped at home, they frequented the retailers who had created the easiest e-commerce environments to navigate, either for home delivery or curbside pickup.

Likewise, the organizations whose supply chains had been most aggressive about investing in the digital technologies that enabled them to serve those e-commerce customers proved to be the most successful at weathering the coronavirus storm. That included not just retailers, but also their suppliers and vendors, as well as manufacturers of medical products, industrial equipment components, electronics and computing devices, consumer packaged goods, food and beverage, apparel and more—even third-party logistics (3PL) services providers.

“Essentially, any of the companies listed in the Gartner Supply Chain Top 25 were the ones who were able to rise to the occasion throughout the different phases of the pandemic,” said Dana Stiffler, vice president and analyst with Gartner Research. “The supply chain organizations who had invested in artificial intelligence (AI) and machine learning (ML) for their scenario planning and analytics—as well as in their ability to respond to those scenarios—are already high maturity examples. Their resulting resilience and flexibility during COVID-19 enabled them to respond much more successfully than other companies who had not made as much of a digital transition.”

In addition to AI and ML, Stiffler pointed to investments in technologies that had enabled essential operations to continue to run smoothly even as precautionary measures, such as social distancing and shift staffing reductions, were implemented.

“Any investments in digital technologies that augment human activity also proved to be exceedingly helpful in addressing pandemic-related supply chain challenges,” she continued. “Wearable devices like radio headsets enabled communication at a distance—whether from 6 feet away or 600 miles away. Virtual reality (VR) and augmented reality (AR) solutions enhanced training, quality assurance, accuracy, efficiency, maintenance and more. Even organizations that had invested in technologies that supported distributed teams working remotely were better positioned to handle the disruption.”

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