Insights from the Data-Driven Inventory event of 27/10/2020
The current pandemic has put all firms in a challenging position. From unpredictable demand of customers to disrupted supply chains, all putting extra pressure on firms to deliver their products timely. At the same time, the pandemic has also given rise to new opportunities such as an increasing need for supply chain resilience and data sharing between suppliers and customers.
Our second online Data2move event took place on Tuesday October 27th, 2020. The virtual meeting was organized around the topic Data-driven Inventory in collaboration with some of our partners: Jumbo, Pipple, Philips, MMGuide and Vendrig, showcased exciting collaboration projects with our students and also participated in a panel discussion about Covid-19 and its impact on their businesses.
This article presents key themes that emerged from the panel discussion. Want to learn more on how Philips has handled the ramp up in demand for ventilators? Or how Jumbo managed hoarding at the start of the pandemic? Then keep on reading!
Challenges in Forecasting Data
Jumbo and Philips have both been active in industries that have been largely impacted by the COVID crisis. Where Philips experienced a huge increase in demand for ventilators from hospitals, Jumbo had to anticipate on the hoarding behavior of their customers. Both companies were startled given the huge increases in demand for some of their products and were forced to handle fast. According to Feyza Gilbaz, supply chain consultant at the innovation department at Philips, technologies like machine learning could not keep up with the growing demand for ventilators coming from the hospitals. Therefore, Philips had to switch to hardcore daily management and information tracking and simple planning dashboards. Jumbo, on the other hand, responded differently and noticed that the demand for some products, such as toilet paper, was similar to festive products around the Christmas period. Therefore, Jumbo applied a similar forecasting model to the SKU’s that showed such hoarding patterns. Thus, both companies switched from machine learning methods to more manual forecasting methods.
Currently we are working with many suppliers from China which entails long lead times. We are looking to improve the resilience of our supply chain by incorporating suppliers closer by.Rudolf Vendrig, CEO at Vendrig IJsselstein B.V.
Supply Chain Disruptions
While Philips redesigned their production processes for the ventilators, they realized they were highly dependent on the components coming from their suppliers. According to Feyza Gilbaz: “At that moment in time, information from our suppliers became more crucial than ever, we needed to see the availability of the suppliers to redesign our processes for the production of ventilators.” She also argues that supply is one of the biggest issues in such crises; this is what we call supply disruptions. According to Zumbul Atan, professor in supply chain management at the TU Eindhoven, supply disruptions rarely happen, but their impact is drastic.
Supply Chain Resilience
Edwin Wenink, owner of SCenergy, argues that we are entering a new era of supply disruptions. To combat such supply disruptions, we should invest in supply chain resilience. Zumbul Atan adds that companies can be far ahead of the competition when the correct actions have been taken to implement pre-active strategies. A pre-active strategy that could have helped Philips and Jumbo during the crisis was to include more suppliers in their supply chains. Moreover, Feyza Gilbaz from Philips mentions that it is important that supply chains should work as a supply chain network. “A supply chain network should always be active and it should include multiple suppliers and multiple clients” according to Feyza. This will increase the resilience within a supply chain because the chain is no longer dependent on one major element.
Rudolf Vendrig, CEO at Vendrig IJsselstein B.V. laundries, describes how the company is looking to improve the resilience in their supply chain: “Currently we are working with many suppliers from China which entails long lead times. We are looking to improve the resilience of our supply chain by incorporating suppliers closer by.” Therefore, our supply chains should be more resilient to be able to react upon disruptions timely. Looking further ahead in the future, investing in resilient supply chains is advisable.
What Lies Ahead – New Opportunities
For Roos Rooijakkers, data scientist at Pipple, new challenges have arisen by collaborating with new partners. Pipple has made new connections with public health services (GGD), governmental crisis teams (Dienst Testen), hospitals and the government. According to Roos, for working efficiently on COVID related themes, these bodies must be sharing data and information. For example, the government is more likely to make better decisions if they receive reliable data on hospital admissions and the number of infections. Pipple supports the different bodies by building data infrastructures, dashboards and models for sharing and explaining relevant data within or between different stakeholders. In a similar way, Pipple supervises the testing logistics. Roos explains: “If someone wants to do a test, they do the test at the testing location from which the test must be transferred to the lab. This supply chain needs to be coordinated. Pipple is helping in this coordination process.” Roos has observed that the pandemic has created more opportunities for data science, however the most crucial factor for success, is whether the company sees the value of data.
Vendrig has received proposals from international companies to start washing mouth masks. Currently, Rudolf Vendrig sees that a lot of employees at companies are responsible for their own masks. This is where Vendrig can jump in and offer clean and hygienic masks to companies that work intensively with mouth masks, such as supermarkets. In order to facilitate such services, Vendrig is currently talking to their soap suppliers, as well as packaging suppliers involved to make new processes ready for this intervention.
All in all, the pandemic has made us realize how dependent companies are on their suppliers and what the consequences of supply disruptions may be. Therefore, it has been found that resilience should be a key aspect in supply chains to combat these types of events. Whereas now most firms react upon the consequences of the pandemic, they could have created a head start if they had the right pre-active measures in place. At the same time, the pandemic has also created new opportunities for firms like Pipple and Vendrig including the importance of sharing data and new developments in the field of providing clean and hygienic mouth masks as a service.
Panel discussion participants
Edwin Wenink – Data2Move orchestrator
Feyza Gilbaz – supply chain consultant at Philips Innovation Services
Rudolf Vendrig – CEO at Vendrig IJsselstein B.V. laundries
Roos Rooijakkers – data scientist & consultant at Pipple and WiDS ambassador
Zumbul Atan – Associate professor of supply chain management at TU Eindhoven
Jan Leensen – Supply chain developer at Jumbo.com