The world looks very different today compared to just a few weeks ago. Who could have imagined or even predicted the scale of the pandemic and the magnitude of disruption it would cause and how it would affect people and businesses throughout not just South Africa, but the entire world.
Supply chains are being tested as never before. Now, more than ever, businesses need to leverage effective processes, flexibility, reliable real-time data, and select technologies to help them deal with the evolving landscape they are operating in.
A weakened supply chain is the biggest business disruption related to COVID-19. A sudden rush of panic buying and hoarding quickly exhausted the supply chain and exposed a major vulnerability in manufacturing and distribution supply chain operations. Almost overnight, society has been divided into two worlds: essential and non-essential. Who would have thought that toilet paper would be worth more than a barrel of crude oil?
How do businesses address this new normal, while at the same time coping with the complex people issues coupled with today’s pandemic?
Manufacturers are being forced to rapidly shift gears, from addressing work-from-home policies to managing extreme swings in demand and uncertain supply chains. This disruption has highlighted the huge value of ERP which during more normal times, is not as obvious, and that is - business continuity.
In the past we have seen an ERP system’s ability to mitigate abrupt business changes, such as ownership change, fire, floods and other disasters. The extensive reliance on ERP solutions we are seeing today, however, to support wide-ranging essential business continuity, has never been experienced on such a sizeable scale.
Today, in response to the COVID-19 crisis, ERP is enabling entire industries to continue functioning due to its ability to support business operations through remote access, electronic data exchange, access to real-time data, real-time factory controls and automated reporting. Never before have we seen ERP play a greater role in the continuance of manufacturing, distribution and supply chain operations around the world.
Many manufacturers are struggling as the goods they produce are no longer in demand, while more agile operators are shifting to making different products. Whether it’s the need to increase or switch to the production of hand sanitiser, e.g. South African Breweries are using alcohol left over from the distilling process to produce hand sanitisers, or convert automotive plants to produce respirators and face shields, manufacturers are under extreme pressure to do more with less.
To reduce possible exposure to the virus, businesses across all sectors are minimising the number of people coming into their offices and plants and maximising the number working from home. For those companies running an ERP system that provides remote access, this shift has not caused major business disruptions. Their management, admin, sales and support teams are able to access their ERP system at home and run the business from there. They have complete visibility of the business, can continue to liaise with customers and suppliers and make rapid informed decisions.
Running a production floor from home, however, is an entirely different challenge, as operators and material handlers are needed, on-site. With production floors currently operating with skeleton teams, it is critical that plant managers are provided with full visibility into the entire process. ERP systems provide this; they are able to precisely schedule work, add, change or adapt bills of material, allocate materials, monitor equipment output, track quality and maintenance issues, all in real-time – a critical tool for production continuity.
A lot of businesses have struggled to source supplies. They have found that their supplier bases are too concentrated, that they have depended too much on a single supplier or suppliers concentrated in a single region, for example, China. This has resulted in huge bottlenecks, negatively affecting the flow of product through the line. ERP systems have assisted business owners to mitigate this risk by enabling them to diversify procurement across multiple suppliers, while maintaining quality and cost efficiencies. Comprehensive lists of alternative suppliers, their lead times and prices are maintained in the system. When a product is unavailable, the system recommends an alternative, helping to ensure production continuity.
ERP systems that have integrated supply chain management with all manufacturing, distribution, and procurement processes have enabled companies to remain flexible, agile and respond to the new normal.
As this period of disruption eases and businesses return to a more normal operating landscape, lessons will have been learnt from when they were forced to work remotely, leverage business technology to the fullest and maintain uninterrupted communications with suppliers and customers.
Businesses will view their ERP solutions in a new light. Apart from improving operational efficiency, boosting profitability and delivering superior customer service, ERP solutions will be recognised for their unique ability to ensure business continuity in the face of sudden disruption.
We anticipate a drastic shift in the way the world will work in the future and in order to survive businesses will need to adapt and build in sufficient flexibility to protect against future disruptions. They should leverage technology and solutions that support analytics, artificial intelligence and machine learning. These solutions also need to ensure end-to-end visibility across the supply chain. Companies with the right solutions in place, solutions that enable them to remain agile, flexible and respond quickly to abrupt change will not only to survive but also thrive. To help achieve this - Embrace a flexible ERP solution to future-proof your business for the 2020s and beyond.