Pandemic reinventing trade digitally
As we are nearing to the end of the year, rewinding the clock we need to do a reality check to understand what drove the digital offerings in the last two years. The enterprises that flourished during the crisis did so because they altered or enhanced their business processes that were already underway.
Here, we have to realise that using digital technologies does not relate to building a digitised and autonomous supply chain. It should be corresponding to supply chain technologies across planning, procurement, manufacturing, and logistics. Such innovations were already in process before the pandemic, but have taken off since then.
As per International Food Policy Research Institute, in lower-income countries like Asia, Africa, and Latin America, SMEs still dominate food retail and services. These businesses diverted to deliver food products and meals using online platforms during the pandemic, as they were severely affected by mobility restrictions and consumer fears. SME retailers in Thailand started to sell food directly to consumers via social media and local SME delivery apps. In India, SME retailers established e-commerce activities using digital payment platforms, and online channels. Even though it started before, it has paved the way for new business opportunities for SMEs during the crisis.
As per the findings from a 2020 survey by Ernst & Young, during uncertain conditions, companies go slow on their technology investments. However, during Covid-19, 92 percent did not halt technology investments. “This speaks to the value of a digital supply chain in helping enterprises navigate disruptive forces and respond faster to volatile supply and demand.”
The survey included 200 senior-level supply chain executives at organisations across many sectors in the United States with over $1 billion in revenues.
It further stated that a shift from linear supply chains to more integrated networks connecting many players is seen with a need for increased visibility across hundreds or thousands of suppliers. This disruption has been enabled by IoT devices or sensors that provide valuable data on where goods are in the chain and their condition.
At the same time, in a blog published by the World Bank on digital safeguards and enablers for Covid-19 vaccine delivery in 2021, it states, “The historic task of Covid-19 vaccine delivery will require a transformational coordination and integration effort, which, if done correctly can lay the base for the digitisation and modernisation of the trucking and logistics sectors. It has the potential for reshaping the face of freight logistics within the coming years. This would alter the market structure of the logistics sector, moving countries towards integrated supply chain services.”
The pandemic has indeed augmented many pre-existing trends, and the supply chain is no exception. The new constraints led companies in several developing countries to innovate and expand digitalisation across various sectors. The race is on for digitalisation.