Beyond Covid-19: Lessons in Supply Chain Resilience

By Christopher Ong, Managing Director, DHL Express Singapore

When the first of the 14 Boeing 777 freighters DHL Express purchased began to come online last year, the timing could not have been more serendipitous. Covid-19 – which was just around the corner – would soon wreak logistics havoc, severely affecting commercial routes and restricting pilot movement. 

Boosted by these new planes, DHL’s dedicated fleet has been able to enhance our access to destinations in Asia and Australia, as well as to the United States and Europe. It has meant fewer and shorter delays than would have otherwise been possible, thereby helping to keep companies and economies running. In the midst of an unprecedented health crisis, it has also meant being able to get shipments of personal protective equipment and medical supplies to those who need them most. 

Covid-19 is, first and foremost, a humanitarian tragedy, the cost of which will not be clear for some time yet. Beyond the enormous humanitarian toll, it has also laid bare vulnerabilities in our existing systems – including the traditional supply chains we rely on. China being brought to a standstill in the early days of Covid-19 is a case in point. 

Suddenly, the world’s access to critical medical supplies, test kits, and PPEs were cut off, accelerating a rethink of supply chains already triggered by trade tensions between US and China. Compared to historical crises, this pandemic is at once a demand and supply-side shock, impacting all countries indiscriminately, and at the same time. 

Prior to the pandemic, the dispute between the world’s two largest economies had prompted a global shift towards greater diversity in supplier bases, transport routes and warehouse locations, and highlighted the need to create buffers against supply chain shocks. 

The move towards greater self-reliance or at least shorter supply chains intensified with Covid-19 due to lockdowns across the globe. Cost has been knocked off the top of the list of business considerations, with the need for resilience, reliability and buffering against risks assuming greater importance. As revealed in a recent DHL white paper on post-coronavirus supply chain recovery, depending on the sector, strategies have ranged from reshoring and localisation to regionalisation and diversification.  

This was something DHL recognised early on. Since 2018, we have been actively enhancing our systems and digital capabilities. From contactless payments to an On-Demand Delivery platform, we made necessary adjustments and technological provisions to offer our customers multiple delivery options in line with our Strategy 2025 vision of “Delivering Excellence in a Digital World”. 

When Singapore moved into its Circuit Breaker phase, these solutions were stress-tested and proved to be strategically sound moves that gave us a head start in ensuring business continuity. Aided by the government’s technology-enabled initiatives, like Safe Entry and Trace Together, we were also able to keep our staff employed – and safe.

A strong foundation in Singapore

DHL has been in Singapore since 1972 and the country’s geographical location makes it ideal as a strategic base for Asia. Singapore’s excellent connectivity continued to prove valuable during Covid-19, allowing us to reach destinations in Asia, Australia, and beyond, and serve many of our regional customers at a time when markets, in North Asia, for example, went into lockdown. 

Singapore’s political stability, good leadership and pro-business environment also meant that nationwide initiatives to ensure essential services like ours could continue were quickly put into place. We could operate and plan ahead with no guesswork, even housing our Malaysian colleagues who were daily commuters here when lockdowns in both countries made daily border crossings for workers who lived across the Causeway impossible. 

This decisive response was something we had experienced before, first during SARS in 2003, and again during the financial crisis in 2009. Then, as well as now, crisis containment measures and policies and advisories which were both timely and relevant made Singapore a much-needed oasis in the midst of the chaos. Ultimately, it has allowed us to keep our focus on our business, and our operations running at full strength as an essential service throughout the lockdown, while coping with increased payloads and robust volumes. Over the last few months, these have been even higher than they were pre-Covid-19. 

An opportunity in every crisis

If the Covid-19 crisis has had any winners, then one was, clearly, digitalisation, for which a new momentum has emerged. All over the world and in every company, the pandemic has forced an assessment of digital readiness, and was effectively a stress test of existing hardware and software, as many worked from home and those at work maintained safe distancing. 

Fortunately, Singapore embraced innovation early on, and as it transitions into a Smart Nation, this has supported and spurred locally-based companies to follow its lead. DHL Express was equally working on improving our digital capabilities ahead of Singapore’s lockdown and was able to take advantage of the increased digitalisation momentum to speed up the adoption of several digital solutions we had, including contactless payments and deliveries. 

However, the road remains bumpy and the future is never certain. DHL recently shared its analysis on delivering stable logistics for vaccines and medical goods during Covid-19 and future health crises as the world works to put this behind us. We need to ensure we have in place what it will take to survive the challenges that the ongoing pandemic has thrown, and will continue to throw, at us. 

There is no telling when the pandemic will come to an end. From having the right technologies in place and addressing the weakest links in our supply chains, to ensuring that we have the right processes from which we can ensure business continuity and resilience, we have to stay prepared to emerge stronger on the other side of this crisis.  

This is the first of a 3-part series featuring the views of business leaders on a post-COVID world and the role Singapore plays as a business hub. The views reflected in this article are of the author’s own.