In the last 757 COVID-19 Business Leaders Survey Report – Wave 2, 34% of the business leaders indicated some level of disruption in the their supply chains, and, as a consequence, more business leaders are stressing now the importance of managing the supply chain during these unprecedented times. Indeed, Covid-19 represents a wake-up call about the importance of the resilience of the supply chains in the continuity of the business model. For example, a radical disruption in your supply chain may require rethinking the whole business model. In light of this, I will share six strategies that I think can be useful to manage your supply chain in these challenging times:
- Take control of your information. In time of crisis, you need to know all the details about your supply chain. Getting involved in the process of generating critical information with data analytics will become very handy. A particular piece of information can be the difference between a good or bad decision.
- Perform a supplier's health check.
The best way to know ahead of time what is coming your way is to be in touch with your suppliers. The more information you have about every firm in the chain, the better you will be prepared for potential disruptions. It is a good idea to check how Covid-19 is evolving in, let’s say, Vietnam if your main supplier is there. Furthermore, keeping and fostering good relationships with your suppliers and 3PLs can save you in disruption times.
- Build redundancies where necessary.
Identifying alternative suppliers for your products can make a huge difference. Do not rely in just one supplier or one country. The focus should be on ensuring continuity of supplies by identifying critical path suppliers. Your alternative supplier may not necessarily come even from the same world region, i.e Mexico vs China.
- Automate processes.
The social distancing in Covid-19 times will accelerate the current adoption of new technologies throughout the supply chain. You will be ahead of the game by providing visibility and information sharing for your customers, with an emphasis on contactless processes along your supply chain. This will open endless possibilities of cooperation between businesses.
- Establish a risk plan
In these days, anticipating and managing risks are almost daily activities. This becomes easier to manage by having a register of the risks and their mitigations. We are not referring just to having a Plan B; you need a Plan C and D. For example, if you were providing the last mile logistics for the restaurants, and they got closed, you need to plan to change your product mix to keep your fleet going. In addition, you may need to inquire about how your suppliers are handling risk in their supply chains and incorporate those plans or their elements into your own.
- Put in place a crisis management plan
Consider that Covid-19 might be around for an extended period of time or any other similar disruption may occur. In times of crunch, it pays off to have at least a draft of a crisis management plan. Analyzing the issues beforehand can help your firm to develop appropriate operational strategies for the moment and to preserve your cash flow.
I encourage you to try some of the above strategies adjusting them to your unique reality. The most important part is that just starting to think about the resilience of the supply chain within your company will help you to be better prepared for future disruptions.
If you have any questions, please reach out to me at email@example.com
Dr. Ricardo Ungo is a Clinical Assistant Professor of Maritime and Supply Chain Management in the Strome College of Business, Old Dominion University. He specializes in the topics of maritime industry and global supply chains. He worked for more than 10 years in the Panama Canal, participating in the Panama Canal Expansion project studies and leading the development of many studies for maritime related projects as Business Development Manager including risk and demand models. He holds a PhD degree in Economics from Vanderbilt University.