Reinforced in 2020: Necessity is the Mother of Invention

By Pia Orup Lund | January 19, 2021 | 0 Comments

Supply ChainPower of the Profession

It’s the beginning of 2021, and the pandemic is still alive and thriving. Who would have dared to think that last March? We all hope — and believe — that 2021 will be different, at least toward the end of the year. We all, of course, wish to return to a semblance of normal.

The pandemic hit businesses unevenly. Some companies experienced increased demand, others saw a slight decrease in demand and still other companies lost demand altogether. It was a similar story on the supply side. A common denominator: the future is difficult to foresee.

In Gartner Supply Chain Research, we saw a significant increase in client interactions in 2020. From a supply chain planning perspective — process and technology combined — we had a more than 40% increase in interactions where organizations sought to leverage our knowledge and expertise for guidance on how to navigate these disruptive times. Comparing the themes of 2019 to those of 2020, we saw a significant increase in the following three:

  • Scenario planning — The ability to do simulations and scenarios fast and easily became increasingly popular. Organizations that lack the processes and technology to support this felt the pain of this inability. Being able to work with different demand scenarios and calculating through the effect on the supply side while tracking assumptions and estimating KPI impacts has been a key theme in many of our client interactions.
  • Agility — Ideally, every organization wants to be able to quickly respond to changes in demand and supply, but this comes at a cost. This theme was more popular in 2020 as organizations could no longer choose not to be agile. Organizations that wanted to survive — and maybe even thrive — had to be highly adaptable. This was true for many organizations in 2020 and will be true in the future.
  • Resiliency — Several organizations in 2020 learned the hard way that their supply chain wasn’t as robust as they thought. This increased interest in resilient planning and resiliency in general. How do we plan for more resilience in our supply chain so we are more resistant to the shocks that will inevitably come? Gartner published several research notes around this in 2020 and had many discussions about this with clients. This trend is also expected to continue.

Automation — how we use technology to automate more of our planning decisions — is another theme of increased interest. No matter how smart we are, how much experience we have or how much training we have received, we humans have our limits. We will never be able to quickly ingest, analyze, predict and prescribe optimized plans after taking multiple constraints into account the same way that a strong technology can. Still, humans remain essential in this equation as it is the marriage of the human reasoning and the power of the technology that produces the secret sauce.

Looking back at 2020, what I find striking is to see what companies — and people — can do when there is an obvious, recognized and strong burning platform. These are things we would have thought impossible before. Just to mention a few things we have seen:

  • Companies shifting their production to meet new customer demands: Companies that produce alcoholic beverages pivoted to produce alcohol for hand sanitizers. Other companies produced personal protective equipment (face shields, masks, gloves), even if they were in a different industry beforehand.
  • Testing methods: Universities and private companies stepped up when several countries ran out of tests (or, the test medium needed to perform the test) and offered alternative testing methods while waiting for supplies.
  • Companies offering testing facilities (for people needing a COVID-19 test) because countries lacked testing capabilities to accommodate the large demand.
  • Restaurants shifting from only offering dine-in to offering take-away as restaurants were forced to shut down and only permitted to offer take-away. This often also required a redesign of the menu since not all offerings are suitable for take-away.

We have seen many more examples showing us how flexible, agile and dynamic we can be when we are forced to be. Another example: how fast we’ve seen vaccines developed, tested and approved. This is not because we skipped half the steps needed to do so, but because we prioritized this above almost everything else.

So, what does this show us?

It shows us that we can be agile, flexible and fast if we have a burning desire to pursue this behavior — and we prioritize accordingly.

Let’s remember this can-do mentality for our future initiatives and help each other to push the limits of what we can achieve.

Pia Orup Lund
Director Analyst
Gartner Supply Chain
Pia.OrupLund@gartner.com

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