Supply chain priorities for the second wave of the pandemic!

As of early October 2020, there have been over 35 million cases and over 1 million deaths due to the coronavirus pandemic. In many countries they are still experiencing the first wave of the virus. But in many other countries they are expecting or experiencing the start of the second wave of the virus. What are the supply chain priorities to deal with the pandemic?

When the first wave hit in early 2020, almost everyone experienced an unprecedented level of personal and business disruption. Faced with the unknown, toilet paper and essentials disappeared from shelves as panic buying set in.

Now that we’re faced with the prospect of a second wave of the virus, how should supply chain professionals focus their time and energy?

The first wave

The fragility of supply chains around the world was exposed in the first wave. Entire countries have been locked down. Business operations were either completely closed or severely restricted. People had to work from home unless they were essential healthcare workers. Logistics and transport were limited only to the transport of essential goods.

Inadequate supplies of personal protective equipment (PPE) for healthcare workers, as well as unavailability of ventilators and critical medical equipment, became top priorities everywhere. Store shelves have been stripped of toilet paper, baking supplies, masks, hand sanitizer and many other goods as the incredible surge in demand triggered by the virus was historic and unplanned.

Awareness of strategic national stockpiles of medical supplies has exposed the inadequacy of the planning, processes and stockpiles that should have been designed to withstand this pandemic.

The necessary tactical responses and strategic imperatives were mobilized by some, but not all.

Many companies were caught on the wrong foot when part of their supply chain depended on the delivery of goods from China or another country. There have been calls to source materials domestically or set up parallel supply chains. But no matter where your raw materials came from, whether they came from a single source or from a single source, you were highly exposed to the threat of lockdowns and supply disruptions.

Retailers and restaurants that only provided in-person customer experiences were shut down completely and remained in distress. They needed to quickly set up online capabilities, local delivery, curbside pickup or takeout services to keep their businesses afloat.

And unless your operations were deemed essential or you were unable to implement the appropriate precautions (e.g. social distancing), many of your employees have had to work from home. Many other employees lost their jobs permanently or temporarily.

The focus was on the entire supply chain. Never before have so many executives, politicians and organizations spoken about supply chain.

We spoke about the new normal in the supply chain brought about by the pandemic and the important lessons we must have learned and applied.

But now that we are facing the second wave of the coronavirus, what supply chain priorities should we focus our energies on?

The second wave

While it is unclear whether a second wave of the coronavirus will be more or less devastating than the first wave, in terms of infections and the death toll it is clear that a second wave is coming anyway.

Wearing masks, social distancing, washing hands and more will likely be the norm for some time. The promise of new vaccines to either prevent or contain the virus is what most of us expect. Yet even if there is a vaccine, there is a high probability that not everyone will take it or even have access to it, further prolonging our overall exposure to the virus both personally and professionally.

Unless the second wave is dramatically worse than the first wave, the supply chain is unlikely to see huge spikes in demand, such as those that caused stores to run out of toilet paper in early 2020. But there is still uncertainty surrounding this one-off phenomenon, so the prospect of demand spikes cannot be entirely ruled out.

In addition, the lack of robustness in many supply chains was revealed in the first wave. Due to supply chain failures and deficiencies, the survival of many companies was at stake.

A second wave is coming. And even when we emerge from this pandemic, the inevitability of future disasters, whether natural or man-made, is a certainty. Supply chain resilience, or lack thereof, will be revealed no matter what lies ahead in the future.

So where should supply chain professionals spend their time now? What should be the supply chain priorities to better weather the second wave of the coronavirus pandemic?

Supply chain priorities for the second wave

  1. Ensuring continuity of supply. Sourcing strategies, be it insourcing or outsourcing, dual sourcing or parallel supply chains, must be implemented to ensure supply in virtually all circumstances. This requires a multi-level mapping of the supply chain and participation at all levels.
  2. Strategic inventory positioning. While no one wants to carry too much inventory, an additional inventory of mission-critical materials (such as strategic national stockpiles) is a great investment.
  3. Supply chain simplification. Now it’s time to simplify every possible aspect of your supply chain. Reduce waste, reduce nodes and modes, eliminate handling, simplify and reduce processes and process steps, and implement a don’t touch strategy.
  4. Visibility of the digital supply chain. The backbone of a digital supply chain is the end-to-end electronic connectivity of all parts of a supply chain. This connectivity enables real-time visibility into what is happening in each supply chain, enabling real-time decision-making. Investing in digital supply chain technologies is critical to future success.
  5. competence development. While acceleration and firefighting are necessary tactical skills to restore supplies, investing in developing your workforce’s skills at higher levels is more important to long-term survival and growth. Equipping your staff with skills and experience in end-to-end holistic supply chain monitoring and management will complement technical investments in a digital supply chain.
  6. disaster planning. The pandemic has caused people to either dust off old contingency plans or wake up to the fact that they had no contingency plans. Now is the time to learn from real-life and real-time experiences of the pandemic and create or substantiate those plans. Additionally, these plans should be stress tested to assume that the second wave of the pandemic will be even worse than the first wave. Honest and pragmatic reviews of preparedness and action plans are essential.
  7. Accept the new normal. If you think things will go back to the way they were, then you need to get over it. For the foreseeable future, assume we will live with this new pandemic-driven reality. Evaluate your organization, policies, processes, talent, supply chain design and investments from a new perspective. A lens colored by the effects of the pandemic and the new normal it has brought.

Conclusion

The second wave is coming if it isn’t already. Ignoring it or assuming the worst is behind us is a wrong assumption.

We also run the risk of becoming complacent over time. It can be natural to relax and forget the horrible experiences that the coronavirus pandemic has brought. Forgetting would mean inviting a replay of the past.

History will repeat itself unless we take action now to improve our preparedness. The supply chain has been at the epicenter of the impact of the pandemic. And it will be again unless we take steps to improve the resilience and resilience of supply chains everywhere. Let’s make sure we follow these supply chain priorities.

Originally published October 6, 2020.

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