DHL: logistics transition to a new normal (COVID-19)
Within the white paper, DHL provides several strategies and actions for organisations to set up supply chains of the future.
Alongside Richard Wilding, professor of Supply Chain Strategy at Cranfield University in the U.K., DHL has envisioned the possible changes in supply chains following the COVID-19 pandemic.
"With the easing of restrictions and the unfreezing of the economy in many regions of the world, it is time to establish a first retrospective summary on the resilience of global supply chains," said Katja Busch, Chief Commercial Officer, DHL, and Head of DHL Customer Solutions & Innovation.
"For us as logistics experts, it is important to analyze the challenges and experiences across industries during this crisis and to envision how resilient supply chains can be in the future so that we may best advise our customers. As a world leader in logistics, we have the insights and the expertise to accurately evaluate the situation."
DHL further details within the paper that looking ahead, industries and supply chains will not be the same post COVID-19. However, currently only the outlines of what the new normal will look like can be seen. In the interim, the pre-new normal will bridge the gap between lockdown and the new normal. For supply chains the potential challenges include: resilience issues, demand related issues, transportation and warehousing related issues and workplace related issues.
"The photographs and TV images were stark. Long before countries went into lockdown, their supermarket shelves were stripped bare. Pasta, toilet paper, rice, painkillers, canned tomatoes, flour - all gone. Factories and distribution have a delayed reaction to extreme fluctuations in demand. In the end, fear of lockdown-induced supply chain disruption was no longer the trigger. People were panic-buying because other people were panic-buying," commented Richard Wilding, professor of Supply Chain Strategy at Cranfield University.
"As in every crisis, the strengths but also the weaknesses of the system become visible. To become better, it is important to learn from such emergency situations. In the new normal, if your supply chain is the same as the one that you had pre-coronavirus, you're probably doing something wrong."
In the interim, DHL sees supply chains experiencing a reconfiguration in order to drive resilience such as more distributed manufacturing, storage, dual sourcing, reshoring, and near-shoring. As well as “instead of focusing solely on tier 1 suppliers, supply chain leaders will have to take a closer look at tier 2 and tier 3 suppliers as well to check if they are able to keep up with the flow of goods.”
In addition, demand is expected to be more volatile, with the potential for consumer tastes to erratically fluctuate. Which as a result will increase the need for flexible and alternative transportation and networks. Workplaces will also need to meet social distancing and sanitation guidelines which DHL sees affecting both warehouse and offices. “Information systems will need to be robust and capable of supporting a distributed workforce by providing access to appropriate data and systems,” while warehouse processes will need to be adapted to one-way systems, distributed picking faces, or socially distanced packing areas.