2021 wholesale supply chain trends: COVID resets priorities

2021 wholesale distributor supply chain trends reflect a new focus on planning in the wake of COVID-19.

Before COVID-19, wholesale distributors were sharply focused on supply chain execution – efficiently managing goods across warehousing, fulfillment and distribution functions.

Now, distributors are looking at the world through a new supply chain lens: supply chain planning.

After the pandemic wreaked supply chain havoc, distributors are zeroed in on shoring up their demand, inventory, and supply planning processes.

2021 wholesale supply chain trend: Shift away from staffing focus

Before the pandemic, a strong economy and low unemployment made it hard for distributors to attract and retain the right talent to keep their operations running smoothly.

Looking back at the cover stories in a trade publication, it’s clear that the distribution industry was very concerned with how to physically keep up with the changing needs of next gen- workers, including supply chain operations. Topics included talent acquisition strategies for distributors and how distributors could attract the next-generation.

In the past, wholesale distributors tried to do more with less people. This included embracing the idea of new warehouse management technologies to help automate signature warehouse processes.

Distributors considered, and in some cases implemented, solutions that enabled machine learning for optimization, robotics, self-guided vehicles, and software with zero-training user interfaces.

In some states where COVID caused unemployment rates to skyrocket from 4% to 20%, the problem of finding people to fill supply chain operations positions ended, even in an environment of an economic downturn where sales volumes dropped off.

In 2021, lessons learned fuel wholesale supply chain trends

This year highlighted many issues in wholesale distributor demand, inventory, and supply planning processes. Distributors often faced too much inventory in some categories and not enough in others, failing to consistently meet the needs of customers and remain profitable. Limited supply chain visibility resulted in unexpected customer demand and supply availability from suppliers.

In a McKinsey article earlier this year, Coronavirus’s Impact on Supply Chain, creating supply chain transparency, estimating available inventory, assessing realistic demands, and managing working capital are among the top immediate actions for companies to address during COVID.

Wholesale distributors are now trying to do more with fewer products. This includes reducing spend in some categories and stretching inventory in others.

Distributors are actively looking at intelligent supply chain management technologies to help them enable resilient supply chain planning and manage supply chain disruption.

Wholesalers prioritize new supply chain technologies  

The 2021 wholesale supply chain trends shift focus in the wholesale distribution industry from people to products during the COVID pandemic. In the past, distributors may have lagged some when it came to adopting the latest technologies, but not today.

Intelligent supply chain planning technologies are now top of mind as distributors want increased visibility into demand and supply planning. These technologies help with:

1. demand sensing

2. optimizing inventory

3. multilevel planning

4. response management

5. simulations and comparisons

6. supply chain collaboration

Some distributors have already experienced the value of integrated supply chain planning technology. During COVID, advanced technologies enabled them to predict customer expectations, continuously align planning processes, increase real-time visibility, and make better planning decisions.

Adapting to change and building resilience

By shifting their focus to strategic planning and investments that fortify their supply chains, distributors  can stay agile amid continued market disruption. While we impatiently wait for COVID-19 to be in our rear-view mirror, there’s still so much uncertainty. Flexibility remains the overriding goal for businesses.

By implementing technologies that enable them to better anticipate and address supply chain changes, distributors can put themselves in a position to manage future constraints and fuel long-term growth.