Disruptions and uncertainty have always existed in the global economy – a fact that recent events have only served to reinforce. I’m referring to the global pandemic, which seemingly overnight turned the world upside down, stretched supply chains to their breaking point, and sent businesses scrambling to adjust to a radical new reality.
For the businesses that have survived, or even prospered in this turbulent climate, having a resilient and adaptable logistics network was key. Let’s look at a couple standouts, including Sonoco, a global provider of consumer packaging and industrial products and Land O’Lakes, one of the largest butter and cheese producers in the US.
Logistics leaders at Sonoco started to see an impact from the pandemic when a large swath of Chinese businesses closed in early 2020. This “disrupted the supply chain and created a ripple effect,” across the company’s US West Coast transportation networks, says Cleve Yarborough, Sonoco category manager for North America logistics.
Land O’Lakes’ senior director of logistics Dustin Braun witnessed similar upheavals. “We saw more disruption in an eight-week period that we have experienced in eight years, both on the demand side and on the supply side,” he says.
But for both companies, speedy cross-team mobilization, a versatile cloud logistics platform, and adaptive logistics strategies were instrumental in helping them outmaneuver the crisis. Following their lead, here are five basic steps you can take to help you build an adaptive and resilient logistics network to weather the storm and prepare for uncertainty.
In order to adapt quickly to change you need visibility across your entire supply chain, and especially your logistics network. When the virus hit one of its region particularly hard, for example, Land O’Lakes saw clearly where it could shift volume from one distribution center to another to sidestep the hot spot. Without a real-time view of its supply chain and logistics operations, including an up-to-the-minute accounting of inventory, such speedy adaptation would have been out of the question.
Meanwhile, Sonoco quickly pivoted two of its idled packaging factories over to making face shields for medical equipment customers, producing more than 1.5 million in short order. “We went from not even knowing what a face shield was to producing 6 million shields in our plants in Chicago and Mexico,” says Roger Schrum, Sonoco vice president of investor relations and corporate affairs.
Modeling your logistics network is a smart way to equip your business to respond decisively to rapid shifts in market conditions. Running what-if scenarios and drafting contingency plans will enable you to choose the best course of action in the face of a sudden disruption or emergency.
At Land O’Lakes, supply teams quickly adapted to the outbreak by working closely with other parts of the business to evaluate options. “Once we aligned on our best estimates – an optimistic scenario, a pessimistic scenario – we built supply chain strategies around those,” says Braun.
Two years ago, Sonoco devised an emergency plan in response to the SARS and Avian flu epidemics. As a result, when COVID-19 shutdowns spread in early March, the company was ready to go with stockpiled personal protective equipment and work-at-home support for its operations and communities in far-flung locations. Says Schrum: “It was nice to be able to pull out a playbook and say, ‘This is what we thought we’d do in this situation. Let’s follow this.’”
To build a truly adaptive logistics system, you need to orchestrate a tightly coordinated series of actions across supply chain functions ranging from order management and warehousing to transportation routing and last-mile delivery. Cloud-based digital platforms can help secure those connections, linking systems and exchanging data across the supply chain and with the end customer, all on one platform.
For example, Sonoco says that its cloud-based Oracle Transportation Management system was critical to steering successfully through the crisis, allowing the digital platform to handle the vast majority of orders automatically while letting the logistics teams focus primarily on exceptions. Modern cloud logistics platforms also offer built-in process automation and innovative digital technologies like robotic process automation, machine learning, and blockchain to provide more speed and resilience to navigate through uncertainty.
In their complexity and interdependence, modern supply chains resemble a rain forest, with thousands or more suppliers and partners participating in these rich, globe-spanning ecosystems. Intricate and timely collaboration across partner networks is crucial to absorbing any shocks to the overall supply chain.
Sonoco has been a leader in collaborating with shipping carriers for mutual success. “We try to have a two-way relationship with our carriers,” Sonoco’s Yarborough says. “That's not only good for Sonoco, it’s good for them. We’re both invested in one another. That helps us weather these storms.
For its part, Land O’Lakes built a digital infrastructure to facilitate cross-team and cross-partner collaboration, helping it make rapid course corrections as events turned chaotic. “We didn’t have a choice to be anything but collaborative in order to make fast decisions,” says Braun. “Overnight we matured our cross function and external partnerships. We’ve made decision-making faster. Agility and responsiveness have been critical to our success” in the face of this crisis.
It’s been said that logistics are the heart of customer service. That’s never been truer than today, when consumers and increasingly B2B customers expect an Amazon-like experience of real-time, accurate ETAs and hyper-responsive customer service. Ratcheting up service levels and customer communications during a disruption will yield outsized returns in customer loyalty and repeat business. As one analyst put it: “Customer service lives and dies in the supply chain.”
Digital supply chain technologies combined with a customer-centric mindset will be critical to achieving heightened responsiveness and precise order promising. Manufacturing and supply chain visibility will also be essential, allowing you to know and communicate accurately when your customer’s product will be ready to ship.