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Industry Updates

The Future is Hazy. But What Else is New?


It’s time to peer into the future — the future of your supply chain.

But, like with those Magic 8-Balls we played with as kids, the future can be a little hazy. In fact, and just to be safe, the folks at Gartner Inc. are gaming out three very different scenarios for what the future could look like, assuming a COVID-19 vaccine isn’t found any time soon.

“As inventory buffers start to deplete and demands shift, there is even more disruption coming our way,” warned Sarah Watt, senior director analyst with the Gartner Supply Chain Practice. “While this crisis requires a fair amount of crucial day-to-day decision-making, chief supply chain officers (CSCOs) must start planning for a recovery and make preemptive decisions to set their organization up for success.”

We’re going to take the word of Watt and her team over that of our old Magic 8-Ball. After all, Gartner’s research is based on the input of more than 800 members of the Gartner Research Circle. A couple months back, 84 percent of those professionals reported disruptions of varying degrees to their supply chains.

Scenario 1: Short-Term Disruption

In this best-case scenario, the pandemic is brought under control “quickly,” restrictions are lifted and consumer confidence returns. “However, supply chain leaders shouldn’t expect an imminent return to business as usual. Supply chain organizations will not be the same after COVID-1; they will enter a ‘new normal,’” Watt said. “During a quick recovery, understanding changes in demand, establishing supply and managing economic impacts will be crucial to the speed of recovery. Demand sensing is particularly important, as consumer sentiment is changing.”

Scenario 2: Long-Term Disruption

In this scenario, the virus is not quickly contained, meaning restrictions stay in place and consumer confidence actually declines. “This is the time to radically review product portfolios and evaluate if they match with the current customer spending habits,” Watt explained. “Stop low-volume and low-margin products and focus on what makes up the bulk of the organization’s revenue.”

Scenario 3: Another Crisis

Here, either the virus returns in force after a period of quiet, or there is a new disruption, such as a natural disaster. This is why it is so important to learn lessons from either of the first two scenarios and implement appropriate steps to protect your supply chain.

So, give that 8-Ball another shake if you like. But a more pragmatic approach would be to examine how any of these scenarios might impact your organization. Some resources to help you can be found here.


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