Supply Chain Agility and Visibility in E-Commerce Sector (COVID-19)
There has been a huge change in business operations in all economies as a result of COVID-19. The pandemic has changed how things are normally done, with several changes employed to reduce the spread of the disease affecting normal business operations. This was not the case before the pandemic, and most organizations certainly could not foresee what was bound to happen. There are organizations that ready to respond effectively to such unpredicted events. Other organizations have a rigid supply chain, deterring any possible response to such events. How well an organization responds to these events is determined partly by how agile and visible the supply chain is. There is no guarantee that such an event wouldn’t happen again in the future, which is why many organizations are currently rethinking their long-term strategies at the moment. As the impact is projected to remain for a while, only a responsive supply chain can benefit organizations by capitalizing on competitive advantage.
Flexibility is key to developing agile and responsive supply chains. A supply chain that responds adequately to changes in the economy offers the organization huge benefits in progressing and building better strategic plans (Christiaanse & Kumar, 2000). Over the last few decades, companies have invested more in responsive and agile supply chains than ever. In the e-commerce sector, Amazon and Alibaba are among the main players, amassing a huge proportion of the global market share compared to the others. Amazon, for instance, has a very responsive and agile supply chain that reduces excess inventory and loss by using technology that focuses on increasing customer satisfaction. Amazon has a diversified delivery fleet that responds to surges in demand whether global or from the local U.S market. The Amazon-bounded trailer trucks carry more than two thousand boxes each. These trucks can easily cater to extra demand during peak seasons. Amazon’s investment in trailer trucks has a greater significance during the COVID-19 pandemic, more than ever before. The consumers are demanding more products from their homes, a factor that has triggered a rise in the need for a responsive supply chain. With the huge investment made at Amazon on its supply chain, it’s easily the best model for other organizations looking to expand their facilities and become more flexible.
Alibaba Group is a close competitor to Amazon in the global e-commerce industry. To compete with well-established organizations like Amazon, you will need a robust investment. A company that acts as a middleman as Alibaba does, is more likely to reduce variability in demand. This is the model of Alibaba Group, as it rarely needs to handle the supply of goods on its own. Rather than storing the goods in its warehouses like Amazon, Alibaba Group connects the consumer with sellers from the whole world. It saves the company any possible excessive inventories. This arrangement benefits an organization very well when its supply chain is disrupted because it needs to make only minimal amendments in its production and supply strategy.
Alibaba supports cross-industry collaborations on many fronts. There are thousands of suppliers from different industries on Alibaba, who are given a platform to market their goods anywhere in the world with minimal physical distribution plans. During the pandemic, the supply chain of Alibaba remains flexible and yet rigid in its structure as its capacity can easily handle changes in demand without causing a bullwhip effect.
