Redefining Logistics Post-COVID-19

The supply chain and logistics industry has persevered the storms brought on by the COVID-19 pandemic. We've shown resilience and have innovated during impossible times. It's something to be proud of, and now we look to the future.

What does a post-COVID-19 world look like? Unfortunately, we may never know. COVID-19 continues to spread, spiking up and down with new variants. The world also faces unforeseen threats, which is why we've heard the phrase "the new normal" in our industry since it began.

We don't know when it will end (or if it ever will). The world is getting more populated, and issues continue to arise. For example, just when industries felt like COVID-19 was under control, Shanghai announced a lockdown at the end of March 2022, testing the present logistics.

We can change the new normal and turn it into an innovative model that withstands unpredictable challenges. In our previous article, Conquering Procurement Challenges After COVID-19, we explored how we can thrive with supply. Now, we explore logistics and what we can do to succeed in today's economy.

It's Stacking Up

Our industry had to face an uncomfortable truth at the pandemic's start. We were not prepared for a global disruption. And it wasn't just us; the whole world felt the sting.

We saw the physical manifestation when containers were stacked up at harbors. We couldn't access ports, and even if we did, we had a hard time getting containers out with the lack of drivers and multiple bottlenecks. The logistics field deals with many players and complex issues.

Today, we still face many of these issues. But what can we do now to withstand them and prevent setbacks in the future?

Steps to the Future of Logistics

Throughout the pandemic, companies had to make drastic changes due to issues with procurement and the consequences in logistics. As a result, many began to invest in more digital resources and AI to offset the challenges. The journey to advanced technology accelerated from a years-long process to months.

Angus Loten of the Wall Street Journal stated, "The robotic process automation market is expected to grow by double digits through 2024, according to information-technology research and consulting firm Gartner Inc. It predicts global revenue in the sector will reach $1.89 billion this year, up 19.5% from 2020." ("Workplace Automation Bots Gain Clout Amid Covid-19 Pandemic", 2021). Loten referenced the hesitations to invest in technology before COVID and how now it is embraced and companies have shifted.

Firms are also rethinking lean inventory models. They are left empty-handed if they quickly run out of materials to transport from a disruption. One response is building relationships closer to your borders and easier to access. According to a 2020 Foley survey, 43% of firms have withdrawn from China or are planning to do so. Logistic companies can prepare for this shift and develop new or changing partnerships.

Today, supply chain and logistics companies can adopt new models that sustain obstacles by valuing technology, diverse partners, and a resilient team.

Pillars to the New Normal

We can focus on three areas to combat future disruption by COVID spikes or other disasters.

1. Decreasing Physical Labor and Handling

The more firms can eliminate contact with materials, the more time, money, and risk we can avoid. For example, a shift to more digital resources allows team members to communicate, process inventory, and other tasks with fewer contact points, decreasing hard transitions if further breakouts or closures occur.

Artificial Intelligence and robotic technologies also help through the logistic process. The more firms can invest in these resources, the better equipped they are for the future and any obstacles.

We can also use innovative resources to leverage data to predict supply and demand changes during lockdowns or transportation closures.

2. Combating Labor Shortage

As we have seen in the last few years, the pandemic has also magnified the labor shortage in this industry. Stacked containers at a port with no one to transport them throughout the country are all signs of logistical challenges that we can improve.

Investing in AI and robotics can elevate this shortage and automize tasks in logistics. This also protects against social distancing or lockdowns since fewer humans and point-of-contacts allow operations to continue in some capacity.

While innovation and technology investments will be vital in combating the labor shortage, we must also invest in long-term societal strategies. For example, we can build a pipeline and talent pool that provides top candidates when you need them by initiating better recruiting strategies.

You can get access to talent if there is ever an influx in demand because of a temporary supply shortage. Firms can also invest in the future generation within their community through education and training programs.

3. Improve Efficiencies

Lastly, firms should continue to improve their efficiencies across the board. This requires a new perspective. Instead of solely focusing on a controlled environment, supervisors and managers will need to invest in a resilient model prepared for uncertainty.

Firms should have a protocol and process for when the economy is stable and when it is disrupted. For example, if a new strain of COVID-19 spikes and closes the ports, what system does your firm have to withstand shortages and prepare itself for when ports open up again?

Firms can continue to look for diverse modes of transportation. For example, at the beginning of 2022, companies picked the highway over railroads to transport goods because of a bottleneck with trains. This shift helped get goods out faster. The railroads should have won the day, but they were unprepared to take in the influx. Logistic firms should be ready to shift their model wherever the best opportunity and method is.

Firms should continue developing resilient models that ensure products are available where and when partners need them.

As COVID-19 continues to change our economy forever, supply chain and logistic companies can take control and navigate a new normal. By creating a new and resilient model, they can thrive in this changing economy.