Surviving the Supply and Demand Disruptions of the Pandemic

Hard-hit businesses have to pivot to find new revenue streams, and farmers struggle to find buyers for an abundance of milk and produce. How can the supply chain improve its technology to better match supply and demand?

 

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Image credit: Michael Rodgers, The Gadsden Times

 

As bottles of hand sanitizer go missing from store shelves, breweries and distilleries all over the US are adapting their manufacturing to meet demand. The companies are taking advantage of a new opportunity to modify their output, thanks to a recent change in regulation. Frontline healthcare workers, emergency responders, and consumers have eagerly embraced the new suppliers as they try to keep to COVID-19 health protocols.

One such company, Back Forty Beer Co. in Gadsden, AL, is shifting production to create as much sanitizer as possible. In an interview with the Gadsden Times, Jason Wilson, founder and chief executive officer of Back Forty Brewing, explains that his management team saw that there was a “huge, massive run on sanitizer.”  Acting quickly to meet the need, the Alcohol and Tobacco Tax and Trade Bureau in the state had made it legal for brewers and distillers to convert their products into sanitizer.

 

 

Wilson went on to describe how his company watched roughly 80 percent of its business disappear over the first 72 hours of the restaurant closures that were triggered by local stay-at-home ordinances. So shifting his brewery production to make hand sanitizer was “a way to survive and provide a much-needed service to the community.” 

Wilson said his company has been working to develop its supply chain management, so it could purchase ingredients such as hydrogen peroxide to ramp up public production. It now sells hand sanitizer to several locations, including the Etowah County Sheriff's Office and Jacksonville State University. The company sees enough revenue in this new line that it is working to supply educators statewide with its hand sanitizer product.

Realizing New Supply Chains in a Post-COVID World

Back Forty Brewing is not alone in having to make a rapid pivot in the changing industrial marketplace. Across the US, manufacturers of all varieties are transforming supply lines, as carmakers are now building ventilators and sports uniform manufacturers are designing and producing protective equipment. 

Having a ready plan to distribute the new product leaves some of these companies in a better place than what’s happening in other industries, such as farming. Many dairy and produce farmers are unfortunately pouring milk into their feed and tilling crops back into the soil.These farmers’ supply chains were intrinsically linked to restaurants. When that demand dried up, they had no other option to move their goods out to consumers. 

These examples prove that there are considerable gaps and vulnerabilities in our supply chains. Finding alternate buyers, changing packaging, and updating processes are much too rigid in most supply chains, and they need improvements so buyers and consumers can readily purchase available, in-demand goods.

Finding and Tracking Suppliers

SAP, Workday, and others offer cloud-based alternatives to a disrupted supply chain network. The SAP Ariba Discovery Network connects buyers and suppliers, and it contains 4 million suppliers in more than 190 countries. 

When news of the coronavirus’ far reaching impact became clear, SAP opened up its network, giving free access so that companies can post sourcing needs and get responses from suppliers. Until June 30, 2020, the network is available for free and buyers can post their immediate sourcing needs and suppliers can respond to show how they deliver.

Scout RFP by Workday offers a cloud-based platform that makes it easier to be more strategic in finding suppliers and tracking all supplier-based activities. The platform can track activities from project intake through sourcing pipeline to supplier management. Like SAP and others in this space, the shared goal is to improve collaboration and visibility in the supply chain to speed response time for high-demand supplies.        

IoT platforms work hand in hand with supply chain systems to track the logistics of the goods throughout the chain. Hopefully, the learnings from our recent experiences with empty shelves in the face of abundant crops will push farmers, distributors, and retailers to create much more collaborative networks that support faster response times and help organizations find buyers and deliver goods where they are needed most.

  • Find out more about SAP supply chain offerings.
  • Watch this recent webinar from Scout RFP on strategic sourcing and procurement in unprecedented, uncertain times.
  • Read how Rogue Ales uses smart sensors and connected logistics in its supply chain.