How Existing Software Will Underpin Future Supply Chain Preparedness
On the day the news that Pfizer had a potentially viable Covid-19 vaccine, Zoom’s share price dropped 15%. Cautious voices were quick to warn that even with a working vaccine bottled and ready to go, there are challenges ahead. The entire workforce wouldn’t be about to immediately ditch working from home and head back to the office. We’d still need Zoom.
For starters, the vaccine needs to be kept at -70 degrees. Cold chain storage, a crucial element of a temperature-controlled supply chain, is fairly limited. In fact, some nations including The Philippines have already conceded that they don’t have the infrastructure to import Pfizer’s vaccine.
Even for nations with the infrastructure like the UK, transport and logistics will be a challenge. And then there’s the small matter of distribution and administration, not to mention potential complications brought about by Brexit.
The fervour with which the news was greeted is understandable; it is simply a sign of our appetite for any news that can set us back on the path to normality. But an approved vaccine isn’t the end of the challenge when the logistics are so complex.
The UK faces immense supply chain disruption next year when it leaves the European Union. And research suggests that it will need to hire 50,000 extra customs officials to handle the extra import and export paperwork that’ll be required after January 1st 2021.
Experts are warning that this could lead to a two-tier import system, with larger importers receiving preferential treatment when trying to land goods into the UK.
Richard Bartlett, Director Brexit & Trade adviser at Export Unlocked, warns that getting goods into the country may be more difficult after Brexit.
"Importing pharmaceuticals into the UK will work differently after January 1st 2021. As it stands today, pharmaceuticals imported from the EU are automatically compliant, but this will change.¨
"One of the big concerns related to post-Brexit customs delays is international trailers being stranded in lorry parks while the paperwork gets done. Given that Pfizer's vaccine needs to be stored at -70 degrees C, this is simply not an option.
"The logistics of getting the vaccine into the country highlights some of the wider problems that have yet to be resolved, continues Richard.
"With the UK expecting an increase from 52 million customs entries to 250 million next year, the country will need to hire and train an estimated 50,000 customs agents.”
Meeting customs demand will never simply be a case of scaling up human resources. Brexit presents an opportunity for the UK to rethink some of its legacy customs processes, if it so desires.
“Without tools that digitize and automate these processes, UK customs agents will only be able to handle so many entries per day, regardless of an increase in volumes. This will lead them to prioritize certain importers over others – usually the higher paying ones in the market, essentially giving certain importers preferential access to the UK, which is rather unfortunate,” concludes Richard.
Thankfully, these digitization tools already exist. Sam Tyagi, CEO and Co-Founder of customs and document management platform startup klearnow.co.uk says that he is looking forward to helping the UK get quick access to the vaccines using the platform post-Brexit, having successfully helped navigate US businesses through customs until now.
KlearNow is an example of an existing technology coming to the fore just at the right time. Customs clearance has been dogged by inefficiencies for a long time. In many instances the process is still conducted using paper documents and email.
KlearNow has been a proven and certified solution with U.S. customs and CBSA in Canada for a while, but with Brexit providing a potential ‘hard reset’ point on customs procedures for UK importers and exporters, a tool like KlearNow can help set new standards for efficiency and cost.
Like Zoom; founded in 2011 but ditched by many investors when a vaccine became probable, and the QR code; invented in 1994 but finding its true purpose (contamination-free information gathering ), existing software solutions will prove invaluable in helping us navigate what has been an unprecedented crisis.
There have been other overlooked success stories too. UK-Estonian cloud manufacturing startup Fractory developed a software solution to reduce the turnaround time on their tube cutting platform from days to seconds. No small feat when you consider how crucial tube cutting is to the entire manufacturing ecosystem and also, how disrupted manufacturing was during the earlier stages of the pandemic..
“Traditionally, the manufacturing engineer has to determine the profiles and cutting contours to calculate cutting prices for tubes. They also have to account for the material costs. It all takes time, especially when there are large quantities of unique parts. By combining different software technologies, we are able to solve the same problem in a matter of seconds,” explained Fractory’s CTO Rein Torm.
When the pandemic first hit in early 2020, economies both developed and developing were unprepared and supply chains took a battering. Some coped, but it was ad-hoc. Breweries retooled to produce hand sanitizer, people were 3d printing ventilator parts from home, shipments were delayed and toilet roll nearly ran out.
According to an Accenture study, 94% of firms experienced supply chain disruption during the Covid-19 pandemic. The report predicts that supply chains will have to expand in-built resilience to survive future disruptions. And while the pandemic is an atypical risk event in terms of scale and onset, one lesson stands out above all else; when disruption happens across borders, supply chains grind to a stop unless software and data are there to underpin decision making.
The Accenture study recommends that “capability should be technology-led, leveraging platforms that support applied analytics, artificial intelligence, and machine learning. It should also ensure end-to-end transparency across the supply chain. In the long-term, risk response will need to become an integral part of business-as-usual protocols.”
The pandemic not only presented novel supply chain challenges, it highlighted a number of problems that should have been fixed long ago; lack of flexibility and visibility of supply chain isn’t just a problem during a pandemic, after all. These issues are what drive the likes of KlearNow to develop customs clearance software and are what drove Fractory to find a way of making tube cutting easier, quicker, and cheaper.
If supply chain managers don’t learn the lessons of this pandemic, they’re doomed to repeat them when the next disruptive event occurs. And the threat of a hard, disorganized Brexit, that disruptive event may not be as far away as we might imagine.