How Industry 4.0 companies quickly assessed the situation and optimized their operations without compromising on sales revenue.

The Covid-19 pandemic has opened up a can of worms for businesses that were not prepared for a global shock of this scale. This has brought out in the open several vulnerabilities of businesses with robust Supply Chain and Inventory Management Processes that have failed to handle demand planning in this crisis. Some of these companies were, in some form or the other, reliant on China to keep their supply chain network running for decades. Also, there are many companies that had large customer bases in Covid-19 hit countries and are unable to sell their products in those countries anymore. Even within the US, supply chains are performing poorly because of a tectonic shift in demand in the market.

But then some companies have been able to quickly assess the situation and adjust their operations without compromising their sales revenue. For the sake of discussion, let’s broadly call these Type-A companies and the badly-hit businesses as Type-B companies. 

What makes Type-A companies different from Type-B companies?

Did the Type-A companies have intelligence on the Covid-19 situation in Wuhan way before the rest of the world? That is an interesting conspiracy theory to think of, but we do not believe so! Type-A companies have been able to keep up with the demand changes of the pandemic because they moved past the linear supply chain network and replaced it with a Digital Supply Chain Network long before this crisis hit us. This has helped their business in becoming more agile in their response to any drastic change in the market, for good or for bad.

Type-A companies are part of ‘Industry 4.0’ 

Since the coinage of this term in 2011, companies that follow the doctrines of ‘Industry 4.0’, have disrupted old methods of supply chain and inventory management processes. They were the first to adopt advanced technologies, automation, and data analytics to create Digital Supply Chain Networks (DSCNs or DSNs). 

Digital Supply Chain Network is simply a collaboration of advanced technologies such as Artificial Intelligence (AI), Internet of Things (IoT), Machine Learning, Natural Language Processing, and Robotics with physical production units and logistics.

End-to-end mapping of product journeys has been made possible by DSNs, even after merging all supply chains in a single network. This provides Type-A companies with enough agility to reroute the movement between production-to-sales on the basis of demand changes in the market. DSNs enhance the following factors involved in the Supply Chain Management Processes:

Speed– Automated order management and product distribution methodologies ensure a reduction in delivery time from days to a few hours. These processes deliver the best results if they are aligned with demand forecasting insights. In the case of the consumer goods industry, it is imperative for companies to have a Demand Forecasting Action Plan in order to weather the economic effects of the pandemic.

Accuracy- Modern day Supply Chain Management technologies can deep dive into granular levels of data-segmentation in real-time and improve accuracy across the Supply Chain Network. This, in turn, automates the required reaction from the production units in continuously driving the fastest-selling SKUs through the supply chain; and reducing wastage and inventory backlogging.

Efficiency- A DSN improves efficiency in the network as it automates the planning process as well as management of logistics and orders. Computer-generated commands for packing, shipping, unloading, and warehousing can be easily linked to each brand, product, category, and price tier. DSN consolidates all these moving parts of the Supply Chain Management process and feeds them in an optimized flow of business requirements. Due to minimal manual intervention in the system, there is also increased transparency across the network.

What can Type-B companies do?

To be fair, regardless of the documented successes of Type-A companies, Type-B companies do have their fair share of wins. Due to a highly accurate supply chain network, often Type-A companies are left with no available stock. Due to restrictions on transportation during the pandemic situation, the replenishment of SKUs at a faster pace becomes difficult for Type-A companies. This gives Type-B companies enough room and time to sell their products to consumers.

We don’t suggest that in the current economic and socio-political environment, there needs to be a complete overhaul of the old processes followed by the Type-B companies. Type-B companies should consider digitally optimizing their Supply Chain Management processes to improve their businesses in the areas that need enhanced flexibility in the long run. 

Considering that there are predictions of rapid demand changes for various goods during and after the pandemic, should you wish to improve the performance of your supply chain network ahead of another major demand change in your sector, we suggest that your business should adopt & implement the best performing strategies of Type-A companies in order to optimize your supply chain’s response to changing consumer needs.

Reach out to our team of Data Scientists by dropping an email to for a Digital Supply Chain Network Plan which is specific to your business