Since the start of the COVID-19 pandemic, increased digitization of various services and the shift towards home have been two of the major effects companies are experiencing globally. With most people working from home and education moving to a virtual mode, the need for food and other goods including toiletries and toilet paper increased immensely.

Changing Dynamics Since COVID-19

According to data from a McKinsey study published in March 2021, consumers and firms should expect variability in buying behaviors throughout the end of the year and beyond into 2022. 70 percent of Americans surveyed felt their routines will be disrupted in 2021 and beyond. Changing routines means ebbs and flows to demand, which make it difficult for CPG and apparel firms to plan their inventory and staffing needs.

Both uncertainty and demand fluctuation led many managers to desire real-time data that could help optimize business decisions. By making the switch from business intelligence (BI) to operational intelligence (OI), companies can better meet consumer expectations including speedy delivery, accurate product inventory data, and seamless ordering processes. This is especially important for companies to gather the accurate context for making more optimized decisions in an environment that is rapidly changing. These platforms offer inventory managers, logistics teams, and management access to live analysis of open orders, inventory levels, and even a look ahead at possible disruptions in the supply chain.

Accelerated Digital Transformation of the Supply Chain 

COVID-19 accelerated the push towards digital transformation. Many processes and communications made the switch to digital platforms across industries and businesses. This also exposed problems in current supply chain sectors. According to a study from KPMG, “COVID-19 has uncovered several weaknesses in corporate strategies, including inefficient and ineffective supply chain management. This became more evident when the delay of essential supplies, like personal protective equipment, put lives at risk, resulting in the crucial need for supply chain digitization to enhance real-time visibility into product attributes including status and location.” Furthermore, the study noted that the pandemic has forced decades of digital transformation to take place in a few short months, including the digitization of the supply chain

OI platforms are at the core of a digitized and modern supply chain. It’s important for logistics and ordering departments to have platforms that improve their decisions and offer continuous updates and data analysis. Online businesses within the CPG and apparel industries were sometimes inundated with orders from consumers, and the pandemic helped these companies realize their current systems were not able to respond to disruptive events at the speed they needed them to.

Dependence on E-Commerce 

As we all know, the pandemic shifted our shopping habits, and many people moved a significant amount of their shopping online. This was an ongoing trend (like digital transformation) that accelerated as people hesitated to shop in person and many shoppers tried online purchasing for the first time. In turn, e-commerce platforms experienced massive gains. There has also been a change in omni-channel strategy from a wholesale/retail focus to a customer-centric business model that caters to consumer’s needs, including curbside pickup, contactless payments, and same-day delivery. As the big box stores and retailers saw their sales come to a standstill, brands-built consumer direct and e-commerce relationships. This put the focus on the last-mile of the supply chain and the direct-to-consumer channel. In the broader picture, consumers developed a dependence on e-commerce as part of their daily routines and lives, which will likely to only strengthen and expand as the pandemic fades.

Increased “Postponement” for CPG Makers

The supply chain disruptions from the ongoing pandemic and its ending will create “postponement” strategies in the CPG industry, a practice the tech industry has used for decades. In this context, postponement is a supply chain concept that involves building assemblies and sub-assemblies. These are kept on hand, in a ready state and are put together for final assembly when warranted by customer demand.

It’s difficult to predict final customer demand, so a CPG provider might prep all the products, pending final packaging so they can react quickly to meet the eventual customer demand. Operational intelligence can inform these actions in real-time, which together can help companies maximize production while still support consumer choices without sacrificing lead times.

Sanjiv Gupta founded OpsVeda with a vision of providing solutions that enable data-driven decision making in the Enterprise. He brings over 20 years of experience in operations, sales and information technology to his role at OpsVeda and has a long track record of successful initiatives with a global foot-print in the High-Tech, Manufacturing and Heavy Engineering industries. Prior to founding OpsVeda, Sanjiv held key roles at SAP America, Flextronics, Enlighta, Tyco, Tata Technologies, and Larsen and Toubro.

Post pandemic stock image by oatawa/Shutterstock