Supply chains felt the full force of the pandemic as they almost entirely shut down in 2020 and into 2021. The result was losses of over $4 trillion for companies worldwide. That was on top of fundamental issues that were at the heart of supply chain disruption – like the fact that there was only a supply chain accuracy of 63%. Experts also believe that the disruption – which is now primarily stock-related – will continue into the late quarter of 2022. With that in mind, how is the new normal for supply chains affecting the B2B industry, and is it necessarily a bad thing? Let’s explore.
Digitization and Automation
The B2B industry was already heading towards digitization and automation. From the beginning of the buying cycle, where buyers would conduct up to 12 online searches before contacting a company, to the end, where 37% of buyers now want a completely self-serve option, the B2B industry was already on its way to digitization and automation.
Open-source software should have been the way to bring digitization and automation to supply chains – although that in itself was floored and attributed to further losses due to cyberattacks on the software. Still, it’s a step towards automation that the flawed supply chain network needed.
Only 6% of brands have complete transparency across the supply chain. There was a total lack of communication pre-pandemic that would cause continuous disruptions and delays. That has somewhat resolved, although many brands still don’t know exactly who is involved in their supply chain. B2B brands can continue to improve this by using a loyalty program for b2b customers.
At the top of the B2B food chain is the seller; they then connect with vendors, who then connect with suppliers – all of whom become a consumer of the B2B brand at the top of the food chain. Loyalty programs nurture open communication, reward sales and operations, and ultimately benefit the brand and the buyer.
Improved Agility And Antifragitility
It probably didn’t seem like it at the time, but the pandemic forced brands to become more agile to change and antifragile to disruption. The most successful brands were the ones that adopted an anti-fragile decision-making process, meaning they cut each decision into easy-to-manage bites. Everyone across the supply chain is now more agile to changes and disruption, primarily linked to the newly introduced supportive software and the ability to scale down the process to save money.
The Downsides Of The New Norm
The downsides of the new norm? It’s still chaotic. There is a backlog of orders, shortages of specific products – like the automotive chip shortages – and staffing issues that are still making supply chains somewhat tricky to manage. The result is millions of dollars worth of losses – experts predict that the automotive industry, for example, lost up to $100 million.
There has also been rapid digitization of sales and the supply chain, which created a system that’s slightly flawed. Supply chains turned to software and technology to automate the supply chains, which ultimately cost more time and money due to IT downtime, software malware, and ineffective software packages.
The new norm isn’t necessarily terrible. The new normal for supply chains offered the chance for everyone involved in the entire supply chain to have more transparency, open communication, and a better understanding of the supply chain cycle. Once the negative repercussions of the pandemic subside by the end of 2022, supply chains should have a better, almost fully automated way of operating.