We have seen global supply chains repeatedly break in 2020, making clear the lessons on diversity, data, and customer choices needed to safeguard against future disruptions.

The supply chain and logistics world spent decades trying to slim down and operate lean, running on a razor’s edge to maximize profits during times of few disruptions. While sectors and individual industries have had their struggles, the COVID-19 pandemic was the most significant black swan in recent memory to impact global logistics writ large.

It is time for supply chain and procurement professionals to re-emphasize the need for resilience and address the structural flaws inherent in many of today’s models. It is time to cast lean aside and ensure security through growth in partners, location, and inventory.

Eliminate single points of failure

COVID-19 taught us that nearly any point in a supply chain could face disruption. Failures can come from delays, illness, or partner issues up and down their chain. Global operations need supply chains that can span the globe, especially in terms of sourcing and distribution.

Eliminate single points of failure for your product and material sources. If you buy manufactured goods that aren’t proprietary, ensure that suppliers have separate companies that deliver raw materials. Look up your supply chain’s tiers to verify that you don’t have this single point on any level. Finding local support near your distribution locations and warehouses is a smart first place to start.

Diversifying where your fulfillment takes place not only makes you more resilient but can help manage and control costs. Having multiple distribution centers allows you to ship from the closest to the customer and minimize expenses. It’s especially potent if you charge flat rates for shipping or promise speedy delivery on every order.

Seek out diversity in all of your operations, potentially including adopting cloud technologies that allow sales, marketing, customer service, and other support teams to operate from any location.

Speed up your data

You must know the status of your supply chain and when it changes to respond quickly. Digitization of the supply chain is one of the best ways to speed up information and enable rapid responses or proactive responses to changes higher up in the chain.

Analytics is a standard tool for building speed, but it requires a broad set of supply chain data. Successful digitization needs you to adopt a platform that integrates with supplier, vendor, and carrier systems. Automating updates and information sharing via APIs and EDIs can help your team create notification systems that identify and alert you as soon as a change occurs.

To be successful, companies must make a specific data request and share information up and downstream. Just as understanding a manufacturer’s capacity can help you plan future orders, insight into your inventory can help them determine the best point to adjust production lines to meet demand from end-customers.

Expand customers’ options

Companies large and small have seen customers change significantly during the 2020 global disruption and one of the most significant driving factors in where sales went was “choice.” Sometimes the customer can see the choice and select between products and fulfillment. In other instances, your work behind-the-scenes allows them to maintain existing habits instead of forcing them to choose another option. Downstream channels and distribution that made it easier for consumers to spend and buy during the disruption protected current purchases and shifted dollars to reliable sellers.

On a local level, options for in-store purchases, local deliveries, and online shopping allowed customers to maintain some spending habits or easily change preferences, such as buying groceries online or upping their takeout budgets. From a global perspective, offering multiple channels for delivery minimized customer impact, reducing the likelihood of delays when a single partner’s distribution network was harmed.

Adding new distribution partners, such as regional 3PLs, splits inventory. While this can seem like a concern, omnichannel sales and commerce tools allow you to integrate with multiple locations and fill via best-fit. What this ultimately means is access to more transportation modalities.

For a business to optimize choice and the other elements discussed, they must begin to pressure test designs before a significant disruption. Understand the changes and options available to you. Test and implement alternatives and analyze these pilot programs under scenarios we now know are possible. Think from pandemics and trade wars to regional raw material shortages and increased storms and natural disasters.

The global supply chain can be resilient once it becomes genuinely global by leveraging a consistent mix of local, regional, and international partners.

Jake Rheude is vice president of marketing for Red Stag Fulfilment