What New Challenges Will Supply Chains Face This Holiday Season?

05.10.20 09:22 AM Comment(s)

Under the best of circumstances, customer behavior can be difficult to predict.  A global pandemic, and the economic consequences it brings, can cause extreme volatility in consumer demand trends.  The ability of the supply chain to adapt to these sudden market changes will be critical to a business looking to take advantage of sales opportunities, while minimizing its risk. 


There is no doubt that Covid-19 has changed the way consumers have decided to purchase and receive products.  According to recent data released by the U.S. Census Bureau, e-commerce was responsible for 16% of all consumer purchases in the 2nd quarter.  This is up from 11%, where the trend started near the start of the 1st quarter.  If this trend continues into the holiday season, we could see a strain on supply chains unlike anything we have experienced to date. 


Some challenges that supply chains may face this holiday season include:


Inventory Supply

Before the pandemic, most manufacturers were already running at maximum capacity. Now, with many manufacturers either having to reduce staff or shut down completely, we are already seeing a slowdown in the production of everyday goods.


Warehouses and Fulfillment Centers

Much like manufacturers, warehouses and fulfillment centers are having to adapt to staffing issues and procedural changes due to Covid-19.  This means that even if a product is in stock, it could still see delays during the fulfillment process.


Customer Experience

With businesses struggling to just get their products to their destinations, it is easy to overlook the customer experience.  There may be product shortages and delays that cannot be helped this holiday season, but that will make customer service and communication even more important.


Some solutions to these challenges:


Increase Visibility Throughout the Supply Chain Process

Now, more than ever, it is important to understand what is taking place throughout your supply chain. Delays in production, fulfillment and shipping can ruin the customer experience. However, with high supply chain visibility, these delays can be caught early and resolved quickly. This information can also be communicated to the customer, so they are not left wondering why their package has not arrived.


Diversify Suppliers and Freight Carriers

What would happen if your supplier had to discontinue their services or there is a disruption due to Covid-19?  Diversity helps to mitigate risk and helps to sustain businesses in less than ideal circumstances.


Collaborate Between Suppliers and Carriers with Technology

Due to the pandemic, remote work is becoming the standard for many companies across the country.  Through technology, teams can now easily collaborate internally, as well as digitally access their carrier connections to quote and tender freight using consistent data that can be maintained for analysis.


A shift from in-store to online purchases could be the greatest challenge for supply chains this holiday season. This trend could increase demand on shipping and warehousing, causing several bottlenecks due to staffing shortages and new safety protocols.  Having the right technology to increase visibility and to collaborate between a diverse set of suppliers and carriers can greatly reduce these risks.  However, in many cases, organizations may not have the required resources to optimize their technology for this new market or are unsure of which technology would best satisfy their requirements.  In these situations, a third party analysis, from a company with expertise on a diverse set of technologies within your industry, is recommended.


Corvita Group is a supply chain strategy, design and implementation firm with a focus on technology. We are seasoned professionals that have a combined experience of over 150 years spanning all aspects of supply chain operations. From procurement to inbound transportation, warehousing, inventory control, distribution, transportation and reverse logistics, we have the experts to address our client’s needs.