The unprecedented supply and demand shocks caused by the COVID-19 pandemic will lead to a focus on resilience, the development of regional supply chains, and the absorption of more buffer inventory in warehouses to ensure that companies have enough product on hand should a similar crisis occur, said Pervinder Johar, CEO of the Pleasanton, California-based company.
Supply chain leaders who routinely spend 80% to 90% of their time on operations would be wise to allocate at least 10% of their work life to thinking of ways their company, industry and country should never have to go through a crisis like this again, Johar told FreightWaves Senior Editor Greg Miller during the second day of the summit.
The supply chain upheavals triggered by the pandemic should prompt stakeholders to think seriously about investing in robust operating platforms that provide global visibility and execution, the CEO of IT provider Blume Global said Thursday at the American Shipper Global Trade Tech summit.
The unprecedented three-phase series of shocks placed a premium on IT platforms like Blume’s that alerted users in real time to the status and locations of freight, vessels, motor carriers, aircraft and equipment. The first phase was the February lockdown of the Chinese industrial hub of Wuhan, a move that cut off massive supply flows to the U.S. and the world. The second phase was a demand pivot in the U.S. as retail stores closed and much consumer buying activity moved online. Retailers reacted by abruptly canceling a mountain of orders, forcing ocean carriers to quickly scrub, or blank, scheduled sailings.
“We needed to know what sailings were canceled or when. We knew it was coming, but we didn’t know when,” Johar said. Strong connections with other platforms were instrumental in providing Blume’s users with the needed information, he said.
The third phase of the crisis began in the late spring when government-imposed lockdowns ended and demand unexpectedly sprung back to life. This led to a scramble by ocean carriers to restore capacity, which sent eastbound trans-Pacific and Asia-to-Europe shipping rates skyrocketing.
Along with monitoring cargo and equipment, Blume faced the challenge of providing real-time status updates on 5,100 draymen responsible for moving goods by motor carrier to and from seaports. Most drayman work as owner-operators, and it is more difficult to track individual draymen’s whereabouts, Johar said. Entities that employ multiple draymen are few and far between.
In addition, the crisis seemingly turned every company into an IT and e-commerce business, Johar said. Businesses became laser-focused on IT once their employees moved from the office to working remotely from their homes. In addition, many providers that had lost their normal distribution channels reimagined themselves as e-commerce companies. “Our platform was able to show our customers what was to come,” Johar said.
Up to now, the Blume platform has passed the stress test with flying colors, according to Johar. “There were many success stories in our customer base,” he said. “The platform has helped many companies during this time frame.”
The Blume platform enables real-time visibility and execution for customers in 120 countries. The platform functions in a multimodal operating environment and connects more than 10,000 service providers of all modes, Johar said.
The CEO said he considers his technology to be an operating platform, not a system that simply provides visibility. He used the analogy of a patient going to the dentist, being told he or she has a cavity, and then being sent home. Visibility alone tells the user where the problems are, but it doesn’t enable execution, he said.