There has never been a moment since World War II when the global awareness and need for resilient and dynamic supply chains has been greater, and the skilled supply chain professional is there to manage it. in a single strategic battle against a common enemy.
The COVID-19 outbreak initially worried companies with established supply chains across China, but it is now clear that its impact on a global scale will be far broader and will be felt in the months and years to come.
In my job, I have the privilege of speaking to dedicated supply chain professionals around the world on an ongoing basis. From the CEO overseeing over half a billion dollars worth of global spending in the fast-moving “big city” consumer goods industry to the little man ordering supplies for a small chain of regional tire shops in Piqua, Ohio.
Lately they’ve been asking the same question: “What are we doing?”
Whether you’re quarantined at home and idle, or your employer is a key service provider and you’re limited to working behind a desk, here are some DO’s and DON’Ts specific to supply chain professionals to keep in mind should – NOW.
Identify how your company’s production capacity and equipment can be retooled to manufacture hand sanitizer, gloves, gowns, face masks or shields, medical supplies or other vital equipment. The need still exists and will continue to exist for some time. Who knows, not only are you helping frontline workers and healthcare providers, you could be taking over your business reclassified as an essential servicestart idle production lines and help your colleagues get back to work and earn a regular income again.
Identify where in the supply chain your company may have spare capacityto help with national/regional relief efforts. It’s not just physical goods that are needed, it can also be transportation, distribution or even warehousing related spaces or activities to move vital supplies and equipment.
Check your entire supply chain – from top to bottomto assess where problems are occurring and where you are vulnerable, what opportunities may arise and to develop a status report and a comprehensive supply chain action plan for management.
Rethink your contingency plan and develop a new oneespecially including virus and pandemic related situations. (This wasn’t our first and certainly won’t be the last pandemic.)
Review the vulnerability and resilience of your company’s supply chain to recover from natural disasters and pandemics, and the preventative measures that you can design and implement nowto deal with fluctuations in stock availability, transportation and security issues and to assess potential recovery times.
Check all your existing contracts for force majeure (unforeseeable circumstances) clauses; and determine which of your suppliers might be able to attempt to enforce them – leaving you vulnerable to disruptions and stock outages. develop solutions.
Check if your company has insurance coverage to cover any losses if your supplier(s) is/are unable to fulfill their contractual obligations.
Check your current supply chains in China, India and other global hotspots. Consider other potential regional opportunities for the future (such as Vietnam, Bangladesh, etc.) as contingencies as these countries have recently worked to improve the working and business environment.
Improve your communication and cooperation with foreign suppliers to not only understand their challenges, but also to monitor ongoing work, discriminatory wage practices and health and safety regulations. These have led to strikes and protests in manufacturing, transportation and other related sectors. Keep in mind that political protests that have been disrupting business recently have not just been limited to Hong Kong and China, but have also taken place in Latin America, the Middle East, Brazil, India and Mexico.
(Yes, delve deeper and move towards “Geopolitical Specialist” when analyzing regional risks in your global supply chain.)
Ask all vendors about their plans for handling demands and capacity changesand how fluctuations can affect their stock availability, quality, extended production and delivery times, and their workforce.
Sharpen the saw. Take the time to invest in yourself and consider taking online supply chain courses such as those offered by authoritative sources such as Supply Chain Canada (www.supplychaincanada.com). They can help with supply disruption strategies and possible solutions during tough times (and yes, they have a new offering that addresses the COVID-19 outbreak). Perhaps you are using the time to finally complete your studies for accreditation as a Supply Chain Management Professional (SCMP)?
Check out your supply chain reading with expenses from Deliver professional magazine(www.supplypro.ca) for insights and interviews with top supply practitioners. Why reinvent the wheel when you can learn practical information from the titans of the industry themselves; who run their businesses and make a difference in the supply chain community. (COVID 19 whitepapers are also available.)
Don’t wait to show up or be asked about your supply chain expertisethe manufacturing capabilities and logistical capabilities of your organization and how these can be leveraged to keep critical supplies and support services open to frontline workers and healthcare providers struggling in your communities.
Don’t take a “wait and see” attitude and hoping that there won’t be another major disruption to your supply chain in the future…it will. Learn from today, plan and prepare for tomorrow.
Don’t lower your due diligence in obtaining much-needed supplies – via new or possibly alternative sources of supply outside of China, Asia or other parts of the world that are struggling. Note that counterfeit markets thrive in times of crisis; and quality and social responsibility In addition to costs and immediate availability, risks should also be taken into account. Now is the time to step up efforts to protect your business and supply chain. not diminish or weaken with fast or cheaper sounding alternatives.
Don’t forget the possibility of accidentally including your company in forced and/or child labor, poor working conditions, other human rights abuses or environmental concerns; in the pre-qualification of new and potential suppliers. Practice responsible and ethical sourcing.
Do not immediately threaten suppliers with legal action (local or remote) get into a bad situation and try to enforce the force majeure clauses in their contracts. Work with them to determine an appropriate course of action instead. Cool heads are needed right now and honest transparency about your situation and the skills you share as a partner and lender is paramount if you are to weather the storm.
Do not engage in hoarding, reselling, or profiteering of food, cleaning and medical supplies, protective gear and other essential items that could be diverted and used in the manufacture of medical supplies for frontline workers in your community. Whether personally or on behalf of your employer – it’s just not right.
Don’t wait for the authorities to issue and enforce new sweeping regulations supply chain control. Make your knowledge and expertise available and see how you and your business can participate in local professional supply chain coordination units to ensure the safety of the public and the continued existence of a strong and resilient supply chain of much-needed food and medical goods and services guarantee.