Earlier this month, I was a guest on Manhattan Associates’ Nucleus of Innovation, a retail and supply chain podcast series “where we tackle some of the most important topics in the industry and learn how leaders are managing their supply chain challenges every day.”
I was joined by Gregg Lanyard, Transportation Product Director at Manhattan Associates (a Talking Logistics sponsor). The focus of the conversation was the impact the global COVID-19 pandemic is having on transportation networks.
Gregg started by talking about how the transportation industry is still in the “reactionary” phase of adjusting to the pandemic and the factors that are causing this disruption:
Logistics and supply chain professionals are responding in incredible ways to circumstances we have never seen before in the industry. Transportation management professionals spend their days analyzing and optimizing both supply [inbound] and replenishment [outbound] networks. They work to find a balance of costs and service standards that consider business constraints like customer demand, transit times, resource availability, facility operating hours, throughput, and of course, overall expense to move product. Right now, however, we have this simultaneous set of disruptions that have thrown that balance completely out the window.
You have panic buying creating stockouts. You have people eating in more due to restaurant closures that are adding to that demand. You have more people working from home which is even changing the times people go shopping at grocery stores. All of these things are impacting what’s on the shelves and when. With increased safety measures in place, along with social distancing requirements, it’s altering the normal route planning and delivery schedules that companies are familiar with. And of course, due to the closure of all non-essential businesses, we’ve lost volume and the network effect of moving freight across the country in multiple directions. That imbalance has had an adverse effect on capacity availability and carrier costs.
On the opposite side, fuel costs are unexpectedly low and traffic, especially in and near major cities, has been nearly eliminated. We’re also seeing some states remove restrictions on equipment sizes and weight limits on essential goods.
Good or bad, all of these things are requiring companies to adapt and react to all of the change to keep goods moving and it’s keeping transportation professionals very, very busy.
I encourage you to listen to the full podcast (just 15 minutes long), where Gregg and I address the following questions:
- Adrian: How are the changes to what we buy (or do not buy), and how we buy, affecting retail and distribution organizations?
- Gregg: Since you coordinate an industry council pretty regularly focused on transportation management, are there some examples of how some of them are adjusting to COVID-19 that you can share?
- Adrian: Do you feel this pandemic will cause organizations to begin rethinking their supply chain strategies for moving goods between sourcing and selling? Will manufacturing be more spread out? Will just-in-time inventory strategies become more conservative?
After listening, post a comment and share your perspective on this topic.