During the COVID global lockdown, industry leaders faced intense pressure and had to quickly reinvent their supply chains to maintain the continuous flow of raw materials and finished goods. Today, supply chains are no longer just a tool for reducing costs; they have become the backbone of business, connecting all links, suppliers, manufacturers, retailers, and logistics providers in a complex network, critical to a company’s survival, success, and growth.
Before COVID, the focus was largely on maximizing efficiency and minimizing costs, often through streamlined, centralized, and globalized supply chains. However, the pandemic exposed vulnerabilities, leading companies to prioritize resilience over efficiency, shifting the focus from “How can we cut costs?” to “How can we prepare for the next disruption?”
“Navigating Uncertainty with Confidence: Investment Priorities for 2025”, a report conducted by Capgemini, revealed that 63% of business leaders intend to boost investments in their supply chains, with a strong emphasis on building resilient, technology-driven systems.
Five years later, where are supply chains?
Greater Resilience & Flexibility:
Digital Transformation of Supply Chains
One of the most significant shifts came in how supply chains were managed. Digital tools, automation, and data analytics became essential during the pandemic. Companies quickly adopted systems for real-time supply chain visibility, enabling them to monitor, manage, and respond to disruptions instantly. The digital transformation initiated by COVID is now a permanent fixture. Technologies like real-time tracking, predictive analytics, and AI-driven demand forecasting are commonly used, creating new opportunities in supply chain planning, operations, and risk management.
Labor Shortages and Automation
Labor shortages became a critical problem during the pandemic, particularly in warehousing, trucking, and manufacturing. This shortage, combined with increasing demand for certain products, led to increased automation in logistics and warehouse management. Companies began accelerating investments in robots, AI, and automation to help fill labor gaps. While the immediate labor shortages caused by COVID have eased, workforce issues persist. The rise in automation has helped alleviate some of these challenges, but recruiting and retaining workers remains a priority.
Decentralization and Nearshoring
Globalization had long favored a model where goods were sourced from low-cost regions like China. However, the Covid-19 pandemic exposed the vulnerabilities of this approach when geopolitical tensions or pandemics hit. As a result, many companies began reconsidering their supply chain strategies, leading to nearshoring (moving production to closer regions), or reshoring (bringing production back to domestic markets) to reduce reliance on distant suppliers and explore dual or multi-sourcing. According to the “2024 McKinsey Global Supply Chain Leader Survey”, companies are now seeing the benefits of their resilience efforts implemented after the pandemic. 73% of respondents report progress on dual-sourcing strategies, and 60% are working to regionalize their supply chains.
Increased Focus on Sustainability
COVID highlighted the vulnerabilities in supply chains but also increased companies’ awareness of the environmental and social issues that could arise in global supply chain networks. As a result, sustainability has become a bigger focus. A 2022 EY report found that 80% of companies are focusing on environmental, social, and governance (ESG) initiatives. By integrating sustainability into their strategies, businesses can better manage risks related to resource shortages and climate change. The reputational benefits, improved regulatory compliance, and potential cost efficiency provided by increased sustainability all contribute to a more resilient supply chain.
Conclusion:
Five years later, supply chains are more diversified, tech-driven, sustainable, and better equipped to handle global disruptions. However, challenges such as labor shortages, geopolitical tensions, volatility, and the ongoing need for greater operational agility continue to influence how companies manage their supply chains. The key takeaway is that today’s supply chains are more dynamic, digital, and risk-aware than they were before the pandemic.
I reached out to Nick Reonegro, Transport and Logistics Industry Leader, and Anant Parmar, Manager here at Avalon CSC, who are continuously collaborating with our clients, seeing firsthand how these shifts are playing out. Here are some key questions I asked to gather their perspectives on how organizations are navigating these changes:
1- In the wake of the pandemic, how have you seen organizations shift their focus to building more resilient supply chains? What strategies are they adopting to minimize disruptions in the future?
Nick: “Over the past, there has been a shift to keeping inventory closer to the point of consumption. Recently we have seen a shift back to the JIT (Just in time) model in some areas, but for the most part, there has been a shift towards local sourcing (where it makes business sense), and higher levels of safety stock, coupled with the obvious building of redundancy and alternative sources of supply.”
Anant: “As a result, this shift has forced many businesses to reassess their cashflow. Securing more inventory and purchasing local generally leads to increased variable costs. This has caused businesses to tighten their belts and take advantage of tools to optimize their intake of materials to remain competitive and relevant.”
2- What are some of the key trends you see in the supply chain that suggest companies are building more sustainable and resilient systems for the long term?
Nick: “There has been a lot of investment in automation, not only in warehouse robotics, but also in software and technology. Supply chain planning, IBP (Integrated Business Planning), S&OP (sales and operations planning) have proven to be invaluable to business success in navigating ongoing supply chain disruptions and volatility in global trade.”
3- Automation seems to be a major focus in modern supply chains. What areas within the supply chain are mostly ripe for automation, and what benefits have organizations seen as a result?
Nick: “Robotics is an area that reduces uncertainty in a business when it comes to internal operations, but investing in processes and tools to be able to manage external disruptions is also critically important. Combining processes and the proper tools to enable those processes is where real value is created. Robotics in operations, that is, warehouse goods to person systems, when properly targeted, is a proven to bring cost reduction and service improvement.”
Anant: “Automation can be introduced in different tiers and scales. It could be automating a process such as data scanning, or physical manipulations such as retrieval, sorting – all the way up to packaging and palletization. The extent of automation really depends on the industry and application. The good news is automation can be introduced to improve single stage elements, rather than the whole nine yards. At the same time, it is critical to evaluate and consider the end game. Automation of single elements may present themselves are being initially cost-effect solutions; however, future additions may require expensive customization and integration investments. It is always a good idea to review the automation aspirations from end to end, providing a comparable on the overall investment that will be required for the most optimal solution.”
4- In your opinion, what are the biggest challenges companies face when trying to implement automation in their supply chain, and how can they overcome them?
Nick: “Bringing in automation (either robotics, technology, or software) does not guarantee cost saving. The main areas where we see some shortfalls are investing in up front engineering and process design to first establish business needs. Challenging your teams internally, and managing change is by far the greatest obstacle to overcome in any major transformation project.”
