08 July 2020   

15 minute read
COVID-19 has interrupted global supply chains and significantly boosted demand for logistics and distribution services. We believe there are lessons to be learned from COVID-19 to build resilience and prepare for future global disturbances. Rachael Bowker, Asset Manager Workplace & Logistics, who manages some of Stockland’s largest logistics properties such as Yennora Distribution Centre, shares her thoughts on how to ramp up the logistics sector for recovery and resilience into the future.

While it is impossible to predict what Australia will look like after the disruption of COVID-19, we know that for many industries that future will be changed.

The short-term impact of COVID-19 for the logistics sector was significant as their business-as-usual activities were affected by ever-changing conditions, but now most in the sector are settling back in to their operational rhythm with a blueprint for recovery. For many consumers, it was the probably the first time they became aware of the importance of the supply chain —when toilet paper, hand sanitiser and soap ran out.

Having worked hard to respond to urgent changes to ride out the coronavirus pandemic, it’s now time for logistics leaders to retool for a stronger future.

To rebound from the coronavirus pandemic, the logistics sector must learn from the many lessons from the pandemic and look ahead to navigate future disruption. COVID-19 has certainly heightened the importance of efficient supply chains and the ability to respond to shifting consumer preferences. 

“The logistics sector is seeing this as an opportunity to drive change and reshape its operating model, “ said Rachael.

The good news is that Australia seems well placed for a range of industries to begin to navigate back to operational health. FM Global’s 2020 Global Resilience Index1 ranked Australia 17th from 130 countries for the logistics sector’s resilience to rebound from economic events and its capacity to deal with supply chain disruptions.

Despite the pace with which COVID-19 arrived , 45% of industrial occupiers2 had a plan to deal with the situation before the start of the crisis. Encouragingly, 74% of occupiers already had a risk management plan in place. But the implications on the sector will be long-term and to manage future challenges, it will be necessary to think about known and unknown risks.

How to improve resilience going forward?

Many businesses will not go back to how they were before the pandemic, but will reinvent themselves to be more resilient, strengthen their capabilities and adapt their operational models to the 'new normal.'

With many facing the challenges of rising costs, increased supply chain complexity and changing customer demands, adopting digital technology will improve visibility, agility and productivity, maximise assets and build the foundation for improved customer experiences.

“Reshaping the supply chain is an opportunity to learn from the recent challenges and choking points exposed by the coronavirus pandemic. For many it’s shown how one weak link can unravel their business,” said Rachael.

Here are five key actions to consider:

  1. Improve visibility in operations
  2. Increase flexibility with end to end supply chain management
  3. Automate physical processes and facilities to unlock capacity at speed
  4. Rebuild the last mile through collaborative supplier partnerships
  5. Move to a digital future to achieve speed and stability.

Rachael says that digital innovation in logistics will be crucial to jumpstart recovery and secure business continuity.

“What many in the sector will have learned is that the crisis has accelerated trends that were already underway like the need for digital transformation. For many this is a chance to navigate the now and transform their business model to ensure it is tech-enabled and can prepare for what comes next,” she said.


Digital transformation and preparedness

COVID-19 has shown the need for accessibility, traceability and reliability in the supply chain. A shift towards digital technology will help businesses find new ways to increase productivity and adapt to changing delivery times.

The traditional view of a linear supply chain is rapidly transforming into digital supply networks with end-to-end visibility, responsiveness, collaboration, agility and optimisation; networks designed to anticipate disruptions and reconfigure to mitigate the impacts.

“The pandemic has shown how important it is to have the ability to respond to customer needs faster in a period of crisis and redirect product flows through smaller distribution channels. Today’s digital platforms, analytics and automation capabilities can enable the sector to respond with speed, certainty and safety,” added Rachael.

Here are some actions that logistics businesses can take to recover and grow stronger:

  • Decide which digital technologies used during the crisis worked and can be adopted for the longer term to bring visibility across the supply chain;
  • Invest in new capabilities and new technology such as artificial intelligence, blockchain, machine learning and predictive analytics to provide a better level of insight and to predict disruption in upstream and downstream in the supply chain;
  • Invest in omni-channel fulfilment platforms with dynamic order allocation capabilities;
  • Invest in new digital tools such as software that enables electronic signatures or shipment location tracking to predict and act on supply chain risks;
  • Have a physical distancing policy in place for warehouses that can be quickly implemented with minimal disruption;
  • Explore intelligent automation capabilities like robotic process automation and cognitive computing that can automatically make decisions and execute response protocols to be more agile, flexible and responsive in real time.

As the crisis eases, the lessons learnt will ensure the sector is more resilient with reimagined supply chains that are customer-focused, agile and more responsible.

1. FM Global Resilience Index, www.fmglobal.com.au
2. Colliers International, COVID-19 Impacts on industrial logistics occupiers
3. Blue Yonder, Distribution and Logistics Redefined