LET'S TALK SUPPLY CHAIN RESILIENCE --Think of Business Continuity--

CoViD-19 had barely hit when the buzzword "resilience" arose.  And, more exactly, supply chain resilience, aka, to be prepared for and to be able to quickly recover supply chains during future global pandemics of new viruses. 

Now, some say agility or agile for pandemic resistant supply chains.  But I do not count them.  That term was used pre-CoViD to mean supply chains doing more than they were designed for.  So no credit for double-dipping on a buzzword.

Comments aside, this is important.  Supply chain management is central to business continuity. The pandemic validated its strategic importance and criticality.

The pandemic presented two shocks.  First was the supply shock as manufacturers/suppliers/exporters shut down.  Then was the demand shock as buyers/importers locked down or had curtailed operations.  The totality was global supply chain chaos and disruption.

Supply chain management is about the end-to-end movement and handling of inventory—finished goods, products, parts, components, and assemblies. That is what supply chain resilience must be built on.

As you build supply chain resilience, you decrease supply chain risk.  Please note, creating resilience is not an overnight project.  Not by any stretch of a buzzword.  There are two key parts to the achieving resilience endeavor.  And these two parts are not separate and distinct. They overlap.

PART 1. Call this the product side of your resilience effort with all its nodes, links, and contact points. 

The first step is to understand your end-to-end supply chain.  If you do not do this, then your efforts can be hit and miss.  There are two sections to it—upstream where suppliers are and where supply chains begin and downstream which is the more recognized area.  And in keeping with the spirit of things being in twos, work within the supply chain is planning and operations.  As planning was turned on its head, we have learned during coronavirus, operations—keeping the supply chain and the business running—is more important.

This is not a purely hypothetical endeavor.  You have the experiences of CoViD-19 as a reference. But if there is another pandemic, it may be different on where and how it strikes and spreads.  So do not limit your work to what has already occurred.

Start your assessment upstream—the inbound supply chain—where the supply of supply chains begins, has the greatest complexity and size.  There are many stakeholders and players upstream.  All this means upstream is at great risk—and hence your need for resilience. 

Look at it in terms of its components:

·       Transportation and logistics

·       Suppliers

·       Products

Transportation, logistic, warehouses—both yours and those of outsider  providers—are your supply chain infrastructure.  They are an integral part of what the supply chain does.

Think of this as bills of materials.  The products and their components.  You want to identify and prioritize.  Rank critical products—and their components/assemblies.  Determine key suppliers.  Select the must-have transportation and logistics service providers.  Be diligent.  Go deep.  The unseen are hidden risks.

That means looking at suppliers' suppliers. And to their logistics, transportation, forwarders, and ports.  If your supplier network and their network has problems, then you have problems.  Risk flows down. 

Map your upstream supply chain and the supply chains within supply chains.  Look for gaps, missing step/players, and weak links.  That may be the critical items you started with or revised ones based on your analysis. The mapping can identify new risks, such as suppliers or suppliers of suppliers for multiple or key products or components. 

Minor ports or small transport or logistics providers could be problems.  Not everything is done by large, MNC provider corporations who are not immune from problems either. 

Another point in the assessment is the chain of custody.  You want to see the flow of products.  Who does what, where, and how?  Gaps in the custody can be red flags for your analysis.

Your mapping and assessment will show areas where to prioritize that can go beyond your initial ideas.  This work is similar to risk reduction with one notable exception.  It is broader in scope.  Supply chain risk, thanks to the insurance view, is often about assets.  That is a narrow take and limits the intent of what should be done. 

The downstream supply chain is built around your company facilities—factories and/or warehouses/distribution centers.  You know what happened there. 

Then add the extensions of mostly your transportation and logistics providers.  How was each provider affected by CoViD?  Is the story about more than layoffs?  What are they doing to restart?  While they may not be your direct responsibility, you may want to work with your customers as to their providers and resilience. 

With the analysis of the upstream and downstream supply chain segments come hard questions about what your suppliers, service providers, and their suppliers and providers and respective approach for resilience.  You may face decisions on changing some of these.  Remember, increased resilience means reduced risk.

Part 2.  This is about technology.

Here come technology and its current silver bullet resilience status.  Think of TV commercials and you hear—contactless.  It makes it harder to spread coronavirus.  Implicit in it too is that technology is contactless and will not be impacted by a pandemic.  It will not become ill.

Digitization may be the best place to start.  Supply chain management can be document heavy. Those documents can be viewed as analog.  Moving away from that paper and into digital provides important data.  That data can be used as input with other technologies.

Recognizing all documents is necessary.  Think of purchase orders, bills of lading for various transport carriers and modes, purchase invoices, freight and logistics invoices, packing lists, customs documents, and so on.  Remember too, documents for suppliers' suppliers and their transportation/logistics providers. 

Now you look at other tech applications:

·       Robotics for warehouses/distribution centers

·       Drones for transportation. You may not be using them now, but you need alternatives and flexibility, especially at critical locations.

·       Blockchain with suppliers and transportation/logistics providers.  Again, go beyond your visible tier of suppliers and providers.  There are also gaps in the number of participants in and order-shipment and current blockchain application. 

·       Supply chain visibility, end-to-end, where digitization and blockchain—integrated—can be used, along with your internal warehouse management system. Again, there may be holes.

·       Artificial intelligence has been offered more in analytical/planning uses, such as with inventory positioning and buying of products and services.  Developing AI to anticipate operations actions and alerting when events are not going as planned.  The latter lets you use what may be limited resources to priority areas.

·       The cloud, within the context of resilience, has a place. From cloud versions of WMS and other technology.  It may give you ways to integrate various technologies both internal and external to your supply chain. 

Present technology does not address and solve everything.  Do not go into it as your resilient silver bullet.  But it is a vital tool for your resilience effort.

Final Thoughts. Building resilience across your supply chain starts with knowing your supply chain, its critical and weak areas, its suppliers, products, infrastructure, and service providers.  This includes identifying all the players and stakeholders.  Technology then works with understanding your end-to-end supply chain—and going beyond--with the upstream segment. 

Some key points for your project:

P  Your total supply chain has contact and contactless elements.

P  Remember, orders can be digital.  But products, components, assemblies, and materials are not.  That is why your resilience program must be more than technology.

P  Go upstream beyond your suppliers and transportation providers.  Problems with their suppliers and logistics firms are your problems, especially during a pandemic.

P  Be diligent.  Go deep.  Look for gaps.  By definition, they are risks.

An unknown is the time frame—how long with a next pandemic take from start until it is contained, and a vaccine is available.  That unknown is a serious challenge to your plan.

Lastly, there is the implementation.  Selling it up, down, across the company, and outside to your stakeholders.  Those firms may have other customers.  Develop and manage an implementation plan, including tasks.  Prioritizing where to start.  Sequencing.  Collaboration. Milestones.  And more.

Good luck.   

DEINDUSTRIALIZATION / RESHORE / ONSHORE AND SUPPLY CHAIN MANAGEMENT

 To take back deindustrializationn and to reshore/ onshore. It is about supply chains. Supply chain integrity starts with understanding Supply Chain complexity, mapping, & risk assessing it. Upstream to suppliers & their suppliers—supply chains within supply chains. Then prioritizing and...

ARGUMENT

In the New Cold War, Deindustrialization Means Disarmament

Chinese security threats offer the chance to rethink the U.S. economy.

BY JACOB HELBERG

AUGUST 12, 2020, 12:49 PM

In 2011, then-President Barack Obama attended an intimate dinner in Silicon Valley. At one point, he turned to the man on his left. What would it take, Obama asked Steve Jobs, for Apple to manufacture its iPhones in the United States instead of China? Jobs was unequivocal: “Those jobs aren’t coming back.” Jobs’s prognostication has become almost an article of faith among policymakers and corporate leaders throughout the United States. Yet China’s recent weaponization of supply chains and information networks exposes the grave dangers of the American deindustrialization that Jobs accepted as inevitable.

Since March alone, China has threatened to withhold medical equipment from the United States and Europe during the coronavirus pandemic; launched the biggest cyberattack against Australia in the country’s history; hacked U.S. firms to acquire secrets related to the coronavirus vaccine; and engaged in massive disinformation campaigns on a global scale. China even hacked the Vatican. These incidents reflect the power China wields through its control of supply chains and information hardware. They show the peril of ceding control of vast swaths of the world’s manufacturing to a regime that builds at home, and exports abroad, a model of governance that is fundamentally in conflict with American values and democracies everywhere. And they pale in comparison to what China will have the capacity to do as its confrontation with the United States sharpens.

The question today is not whether America’s manufacturing jobs can return, but whether America can afford not to bring them back.

In this new cold war, a deindustrialized United States is a disarmed United States—a country that is precariously vulnerable to coercion, espionage, and foreign interference. Preserving American preeminence will require reconstituting a national manufacturing arrangement that is both safe and reliable—particularly in critical high-tech sectors. If the United States is to secure its supply chains and information networks against Chinese attacks, it needs to reindustrialize. The question today is not whether America’s manufacturing jobs can return, but whether America can afford not to bring them back.

America’s superpower might was made on the factory floor. The nation’s vast industrial capacity carried it to victory in World War II and gave it a commanding advantage over the Soviet Union. As recently as the early 2000s, iMacs—a symbol of American high-tech dominance—were still made in Elk Grove, California. But since the 1970s, more than 7 million American manufacturing jobs have evaporated—over a third of the country’s entire manufacturing workforce. In the first decade of the 21st century, more than 66,000 manufacturing facilities closed down or moved overseas. America’s share of the world’s printed circuit board production has dropped 70 percent since 2000; China accounts for around half of global production today. The high-tech industry is hardly exempt: As of 2015, Chinese factories produced 28 percent of the world’s cars, 41 percent of ships, more than 60 percent of TVs, and a staggering 90 percent of the world’s mobile phones. Indeed, Apple’s Elk Grove plant is now an AppleCare call center.

Left: Plant workers gather after hearing that their metalworking company, Revere Copper Products Inc., in New Bedford, Massachusetts, will close March 6, 2007. The company, founded by Paul Revere, once provided copper sheathing for the city’s whaling fleet but shut down because of foreign competition. PETER PEREIRA/THE NEW BEDFORD STANDARD TIMES/THE ASSOCIATED PRESS  Right: Apple employees work on iMac computers at an Apple manufacturing plant in Sacramento, California, on May 24, 1999. GETTY IMAGES

At the same time, a new Silicon Curtain has begun to descend. As FBI Director Christopher Wray recently pointed out, China does not seek a world where its companies lead alongside other global companies but one where its companies exploit a domestic monopoly at home to drive other companies out of business everywhere else. In the energy sector, China’s vast web of state subsidies supporting its domestic solar-electric industry dropped world prices of solar panels by 80 percent between 2008 and 2013. A report by the U.S. Senate Foreign Relations Committee echoed this trend in more cutting-edge technologies: “Foreign technology platforms are restricted from operating in China, allowing Chinese platforms that offer similar services to thrive and expand into new markets.” The report also highlighted examples of Chinese “national champions” expanding internationally thanks to unfair government support and subsidies, noting, “Huawei’s price was so low that, absent the subsidies the company had been provided, Huawei would have been unable to even produce the necessary network parts.” Beijing’s “Made in China 2025” initiative outlines in blunt terms China’s ambitions for dominance in artificial intelligence, robotics, aerospace equipment, and biopharmaceuticals—high-tech industries that represent the future of the global economy.

The United States’ industrial overdependence on China poses profound national security threats.

The United States’ industrial overdependence on China poses two profound national security threats. The first is about access to the supply of critical goods. As I warned in June, U.S.-China relations are now more volatile than at any time since Tiananmen, and it is an open question whether decoupling will be slow and soft or hard and fast. As the bilateral relationship further deteriorates, American companies face a growing risk of experiencing sudden delays or disruptions to their supply chains, either as an overt retaliation by the Chinese Communist Party (CCP) to U.S. policies or in the form of gray-zone tactics to kneecap U.S. companies and promote Chinese alternatives to fill the void in the global supply for key goods.

This risk, once deemed far-fetched, recently came to life when Arm, a U.K.-based chip designer, recently appeared to have suddenly lost control of its China-based joint-venture subsidiary, Arm China. As Business Insider reported, “Arm fired Allen Wu, the head of Arm China, but Wu refused to acknowledge the decision and has continued overseeing operations of the business unit, according to Bloomberg. Arm China also reportedly won’t let members of the UK parent entity onto its premises.” It has been seven years since the Alliance for American Manufacturing released a list of critical military hardware, with both offensive and defensive applications, that are susceptible to supply chain interference. American missiles depend on Chinese propellant; American night-vision goggles depend on Chinese metal.

During the pandemic, the Chinese government is also believed to have given preferential treatment to its domestic semiconductor companies, allowing Yangtze Memory Technologies to continue operating, all the while requiring all foreign-based chip makers, such as Samsung, to completely halt their operations. This is what political scientists have dubbed “weaponized interdependence”—exploiting control of critical nodes in the global economy to exert geopolitical leverage over one’s competitors.

The second risk of U.S. industrial dependence on China is about the integrity of powerful dual-use commercial technology products: civilian goods such as information platforms, social network technology, facial recognition systems, cellphones, and computers that also have powerful military or intelligence implications. These products are increasingly becoming a “perfect weapon” for U.S. adversaries such as Russia and China that continuously seek asymmetric ways to weaken the United States. The Senate Foreign Relations Committee report noted, “the suites of new and emergent digital technologies … —including 5G infrastructure, social media, block-chain, digital surveillance, and genomics and biotechnology—are all widely acknowledged as being on the cutting edge of this new competition.” China’s command over critical nodes of the world’s supply chains provides it with vast strategic leverage over the integrity of critical hardware products.

A 2018 Bloomberg investigation reported that Chinese operatives had inserted a miniscule microchip into the servers of Supermicro, a company whose systems are used by institutions ranging from major banks to the Pentagon. Though all parties involved denied that such a breach occurred, even the possibility of such a hardware hack sent shudders through Silicon Valley and the U.S. national security apparatus. Even if disputed, the report laid bare the dangers of outsourcing American manufacturing to an American adversary.

Public concerns over the integrity of Chinese-built technology systems recently reached a boiling point in the software world, with the U.S. government calling on ByteDance, a Beijing-based global technology company, to divest from TikTok, its U.S. subsidiary. In some cases, senior government officials, ranging from President Donald Trump to Senate Democratic Leader Chuck Schumer, went as far as floating the possibility of a complete suspension of the app.

The public’s justified concerns trace back to China’s civil-military fusion doctrine, which blurs the line between the CCP and China’s private sector. Under China’s 2017 National Intelligence Law, the CCP could compel an individual engineering employee at TikTok based in China to provide the party with intelligence assistance and keep that assistance entirely confidential, without any of TikTok’s U.S.-based executives even being aware.

In effect, this means companies based in China could be subject to a dual reporting and corporate governance structure—their company’s executives on the one hand, and, on the other, a shadow governance structure reporting to officials from the Chinese Communist Party. China-based companies must effectively answer to two masters. Arm’s U.K.-based executives learned this the hard way. But the principles were spelled out in broad daylight by Chinese President Xi Jinping himself when he compared the relationship between Chinese citizens and the CPP to “stars revolving around the revered moon.” “Listen to what they say,” the Taiwan-based analyst Ben Thompson cautioned.

The United States’ slow drift toward deindustrialization is not a threat to Democrats or a threat to Republicans—it’s a threat to the United States.

The United States’ slow drift toward deindustrialization is not a threat to Democrats or a threat to Republicans—it’s a threat to the United States. Addressing it will require an American solution that transcends party lines. It will require an extensive collaborative effort between the government and private sector to take inventory of the products salient to national security—determining which high-tech and vital goods must be produced domestically, which can safely be sourced from allies and friendly democracies, and which can still be imported from the global market, including from authoritarian states like China. Carrying out this strategy and operationalizing it will take time and substantial resources. Still, a few elements for such a strategy are worth highlighting.

Before the creation of the Strategic Petroleum Reserve in the 1970s, the United States was vulnerable to geopolitical blackmail by OPEC nations. Eventually, public investments in expanding the country’s domestic alternative sources of energy helped move the country toward energy independence. Similarly, the United States must define and reconstitute a “minimum viable industrial capacity,” based on the production capacity it needs not simply to meet a national emergency but to wage a long-term competition. A potential initial area of focus for such an effort could be the production of semiconductors and microchips, given that high-performing chips are indispensable to make headway on nearly every other front—AI development, robotics, computers, cellphones, and more. Currently, Taiwan—which China dubs a renegade province—is home to Taiwan Semiconductor Manufacturing Company, which accounts for half the global supply of computer chips used in everything from F-35 fighter jets to Apple devices. The United States cannot afford to ignore China’s plans to eventually seize control of Taiwan and the consequences this would entail for the entire U.S. technology industry.

 Reconstituting America’s domestic production capacity will be contingent on procuring a reliable, abundant supply of key natural resources at a low cost, building up a large talent pool of skilled industrial workers, and making substantial investments in fostering hotbeds of innovation.

For starters, the goal of reopening factories won’t be economically sustainable if the United States can’t ensure cost-effective access to natural resources and raw materials those factories need to produce finished, manufactured products. China has made acquiring premium access to resources such as zinc, cobalt, and titanium a national priority. By making investments and loans worth hundreds of billions of dollars across the developing world—particularly in Africa—it has established a model of trading technology and infrastructure for resources. In one such case, China struck a deal with a Congolese mining consortium, Sicomines, to secure access to critical minerals for electronics like copper and cobalt in exchange for investing in essential infrastructure projects like hospitals and highways.

To compete, the United States and its allies will need to play a shrewd game of macroeconomic chess, offering their own funding for infrastructure and development, but without the predatory debt-trap qualities that often accompany Chinese funding. Many African countries have interlocked their economic futures with China because they see little alternative—if Chinese loans once came with few strings attached, they now often require adherence to a variety of CCP norms. Last month, the Senate Foreign Relations Committee offered one idea: an International Digital Infrastructure Corporation that would offer these countries the financial incentive and support to buy and install American-made hardware. Providing that alternative—assistance and financing that authentically empower recipient governments and benefit the local population—could shift the economic orientations of nations that would prefer to be less entwined with an expansionist authoritarian power. It could also serve as a powerful tool to supply U.S. and allied manufacturers with critical raw materials needed for the production of strategic hardware.

Like a tech startup taking on an incumbent company, if the United States is to take on China’s dominance in global manufacturing, it will also need to staff the so-called American team with a skilled and innovative workforce. This means reversing the current suspension on H-1B visas to once again enlist the world’s best and brightest minds. This also means addressing the so-called trade skills gap, which has left vital manufacturing roles—such as machinery and welding—unfilled. In a 2019 survey by the National Association of Manufacturers, almost 3 in 4 manufacturing employers cited “the inability to attract and retain a quality workforce” as their most significant business challenge. “We shouldn’t be criticized for using Chinese workers,” one Apple executive told the New York Times in 2012. “The U.S. has stopped producing people with the skills we need.”

Washington must take note of these realities and invest in low-cost and specialized, skill-based workforce training for employees in vital industries, in addition to deepening its pool of advanced scientists and engineers. Bureaucratic reorganization could help focus government attention and cohesion on this problem: Consolidating the Department of Education and Department of Labor into a Department of Education and the Workforce would create a single entity dedicated to endowing Americans with the skills they need throughout the full continuum of their professional lives. And while it’s true that not all jobs will return, focusing training on high-tech manufacturing will prepare a workforce that attracts new, potentially higher-paying jobs to U.S. shores.

Although policymakers’ natural instincts—and political incentives—might push them to spread reshoring investments in a large number of cities across the country, some of America’s most successful global hubs of economic activity have been geographically concentrated: Wall Street, Hollywood, Silicon Valley, the Motor City. Geographically concentrated regional hubs unlock network effects from the powerful forces of platform economics and could become growth engines for their state and the rest of the country.

Much like magnets, hubs attract, in a self-reinforcing loop, talented individuals from around the world who self-select to relocate closer to their industry’s center of gravity. This clustering of specialized expertise increases the connections between the participants of the ecosystem, allowing them to compound the institutional knowledge of the companies they work for and pattern-match problems and solutions more quickly than elsewhere. Together, the government and private sector could work to build manufacturing centers to rival those of China’s Shenzhen.

Once this new baseline is established, the United States and friendly democratic states must create an Allied Industrial Free Trade Area that maintains America’s industrial base and strengthens it across democracies, forming a new democratic bloc that preserves the benefits of efficiency and competition while helping American global companies’ wean themselves off their demand-side dependence on the Chinese market. The foundations for such a bloc are already becoming apparent through ideas like U.K. Prime Minister Boris Johnson’s proposal to expand the G-7 to a new D-10, a 10-nation democratic coalition that can collaboratively fund and create alternatives to reliance on Chinese 5G technology.

For a long time, we assumed U.S. deindustrialization was inevitable—today, the coronavirus crisis has given Americans a small taste of the sour realities that result from decades of industrial neglect and disrepair. The United States’ supply chains and information networks are precariously dependent on, and exposed to intrusions by, a hostile foreign government bent on undoing liberal democracies. U.S. policymakers and technology executives should consider what might happen if, as the historian Yuval Harari warned, “Beijing knows the entire medical and personal history of every politician, every judge and every journalist in your country, including all their sexual escapades, all their mental weaknesses and all their corrupt dealings?” Neglecting to quickly safeguard the access and integrity of American supply chains and information networks in the face of successive warnings would be a costly strategic mistake and a blow to U.S. national sovereignty.

https://foreignpolicy.com/2020/08/12/china-industry-manufacturing-cold-war/

AMAZON, RETAIL, E-COMMERCE, CONTINUING COVID, AND SUPPLY CHAIN MANAGEMENT --Oh, Yeah, and the Big Bad Wolf, Amazon--

The pandemic has had a significant impact on businesses and the economy.  And the longer CoViD continues without being contained, the greater will be the change in how businesses operate. 

E-commerce has been one segment that has seen growth, given lockdowns, and concerns about social distancing.  The surge in online sales will likely continue.  Coronavirus is an e-commerce accelerator.  And with the extended pandemic, customers may continue to shop online.

Supply chain management, the driver of order delivery velocity that made e-commerce successful, should face significant transformation.  From e-commerce to the global pandemic, the strategic importance and criticality have been validated. 

With e-commerce being strong, many retailers have been selling online.  E-commerce is a customer demand for buying and order delivery service.  To put that into a competitive context, let's talk about the big dog in the e-commerce fight—Amazon. 

Amazon created order-delivery velocity that made them successful with, pre-CoViD, an almost 40% market share, and made e-commerce viable. They crafted customer convenience. Delivery to customers.  No going out to stores in hot or bad weather.  Buy from your home.

They built a new supply chain management with end-to-end velocity—one that is disruptive innovation.  This supply chain gives them control of the movement of products from origin factory to customer delivery.  Part of this supply chain is its transportation and logistics infrastructure.  They did reverse outsourcing and brought service in-house. Generally, in-house logistics/transportation services are lower cost than using outside providers.

·       Freight forwarding.  Amazon does its own forwarding from China.  Think about that.  There they are upstream at the start of the supply chain.

·       Cargo airplanes. They will have 80 planes by 2021.  These increase the speed at which they can move products.  

·       Warehouses.  Amazon has very large distribution centers.  More than 175 of them worldwide with 150 million square feet.  Over 100 are in the US. Now they are increasing their warehouse footprint by 50% in 2020.  A sign they see the pandemic business surge will hold.  Think of the proximity these warehouses give them to deliver orders quickly.  It also aids with a likely Black Friday online buying instead of consumers going to stores and with Christmas buying.

·       Delivery service. For the last mile, they have  60.00 trucks with another 100,000 ordered.  They are estimated to be the fourth largest delivery service in the US.  Bank of America says their delivery service could be worth up to $230 billion by 2025.  Note, that value was set before the CoViD e-commerce surge. So that value could go higher.  Think of what this delivery capability means as USP, UPS, and FedEx struggle with the e-commerce volume surge and the holidays. A delivery buffer and more.  In July, Amazon delivered nearly 2/3 of its online packages.  That is up from 54% the July before.  And, given the order swell, is even more significant.  It also provides a buffer from the price increases of UPS and FedEx—a competitive advantage.

·       Drones. They have been authorized to fly commercial delivery drones. Think of it. Faster delivery of orders, such as same day.  And do it beyond the visual line of sight.  It also provides supply chain resilience. Last year, they debuted an electric delivery drone that can fly 15 miles and carry shipments/parcels of 5 pounds.

·       Technology.  Having so much of their own warehousing, delivery, and related infrastructure provides a foundation for the important end-to-end supply chain visibility.  Plus, Amazon has its web service, aka, the cloud.

·       People.  They have 1 million employees.

This is some serious scale and supply chain competition.  All this framework positions them to handle more volume and to move inventory faster for improved order delivery speed.  In other words, it ups their competitive position.

Some retailers and CPG/FMCG manufacturers with stores are using their store network as micro-fulfillment centers.  These provide location, location, location for their customer base.  The location helps with the move toward same-day order delivery.  It also makes stores dual-purpose facilities—retail and e-commerce.

The trade-off to the location is stores are not as efficient, and hence cost more than warehouses, for order-picking and preparation.  The dual-purpose also comes into play with inventory.  If store sales remain soft as the coronavirus continues and are used for online orders, then inventory planning and moving through the end-to-end supply chains become more complicated with their dual usage of store and online--and differing inventory requirements for each.  The next question for stores as e-commerce fulfillment is how they position them as to delivery to customers—and customer convenience—or for customers going to stores for curbside pickup.

Amazon has been aggressively creating its end-to-end supply chain that delivers orders quickly. They have not stopped during the pandemic.  All this adds to what is required to compete in the online reality of the new normal.  

For those that have been slow getting your e-commerce supply chain, ask yourself what your plan is to be competitive in the e-commerce business with order speed.  How do you plan to compete—either against Amazon or just for your business?  Either way, customers look at order delivery speed.  If it helps, think of order delivery velocity as customer retention.

Amazon has done its supply chain differently.  What if you do yours that way—not the same old?  And this does not mean trying to replicate what they have done.  For example, design your supply chain from the customers back through to your suppliers. That makes sense since e-commerce is about order delivery.

A takeaway from the pandemic will likely be the strong use of online buying for both B2C and B2B.  For manufacturers, that can become about your manufacturing to delivery order speed.  Perhaps more so with Build to Order firms.

Resilience is the buzzword thrown around with CoViD—so you will be ready for the next global crisis.  I also see fluidity as a need.  It is more than flexibility.  Dealing with the changes and challenges that will come as CoViD continues and the transforming as the new reality evolves.  Plan A could become Plan D.    

Amazon came to dominate e-commerce because other firms were slow to see what was happening and to change their supply chains and step up to be a serious player.  A few have stepped up to the challenge.  Still more need to.  The pandemic has made it essential.