There are over 35 million cases and over 1 million deaths due to the Coronavirus pandemic as of the beginning of October, 2020. In many countries they are still experiencing the first wave of the virus. Yet in many other countries they are either expecting or experiencing the start of the second wave of the virus. What are the Supply Chain priorities to deal with the pandemic?
As the first wave struck in early 2020 unprecedented levels of personal and business disruption was experienced by most everyone. Toilet paper and basic commodity items disappeared from store shelves as panic buying set in, in the face of the unknown.
Now that we face 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 were locked down. Business operations were either closed entirely or severely restricted. People had to work from home, unless of course they were essential Healthcare workers. Logistics and transportation were limited to movement of essential goods only.
Insufficient supply of Personal Protective Equipment (PPE) for Healthcare personnel, along with the lack of availability of ventilators and critical medical equipment became top priorities everywhere. Store shelves were stripped of toilet paper, baking supplies, masks, hand sanitizer and many other goods as the incredible spike in demand prompted by the virus was historic and unplanned.
Awareness of Strategic National Stockpiles, as they pertain to medical supplies, exposed the inadequacy of the planning, processes and inventories that should have been designed to withstand this pandemic.
The necessary tactical responses and the strategic imperatives were mobilized by some but not by all.
Many companies were caught flat-footed if any part of their Supply Chain depended on the supply of goods from China, or any other country for that matter. There were calls to domestically source materials, or to establish Parallel Supply Chains. But no matter where your raw materials came from if your were single sourced, or sole sourced, you were highly exposed to the threat of lockdowns and supply disruptions.
Retailers and restaurants that provided in person customer experiences only were shut down entirely and left scrambling. They needed to quickly establish online capabilities, local delivery, curb-side goods pickup, or take-out services in order to keep their businesses on life support.
And unless your operation was deemed essential, or you were able to implement the appropriate precautionary measures (eg. social distancing) then many of your employees were forced to work from home. Many more employees lost their jobs, either permanently or temporarily.
Through it all Supply Chain was front and centre. Never before have so many leaders, politicians and organizations talked about Supply Chain.
We talked about the the New Normal in Supply Chain brought about by the pandemic, and the vital lessons that we need to have learned and apply.
But now that we are facing the second wave of the Coronavirus, what are the Supply Chain priorities that we should be concentrating our energy 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, with respect to infections and the death rate, it is clear that a second wave is coming regardless.
Wearing masks, social distancing, washing hands, and more will likely be the norm for some time to come. The promise of new vaccines to either prevent or curtail the virus is the expectation of most of us. However even if there is a vaccine there is a high likelihood that not everyone will take it, or even have access to it, further prolonging our general exposure to the virus both personally and professionally.
Unless the second wave is dramatically worse than the first wave it is unlikely that Supply Chain will see enormous spikes in demand which saw stores run out of toilet paper early in 2020, for instance. But there is still uncertainty with this once-in-a-century phenomenon such that the prospect of demand spikes can’t be dismissed entirely.
Additionally the lack of robustness in many Supply Chains was exposed in the first wave. The very survival of many companies hung in the balance due to Supply Chain failures and shortcomings.
A second wave is coming. And even when we get past this pandemic the inevitability of future disasters, whether natural or man-made, is a certainty. Supply Chain robustness, or lack thereof, will be exposed no matter what we face in the future.
So where should Supply Chain professionals be spending their time now? What should the Supply Chain priorities be to better weather the second wave of the Coronavirus pandemic?
Supply Chain Priorities for the Second Wave
- Assuring Continuity of Supply. Sourcing strategies, whether that means insourcing or outsourcing, dual sourcing or parallel supply chains, must be implemented to virtually guarantee supply no matter what may happen. This will require multi-tier Supply Chain mapping and participation at all levels.
- Strategic Inventory Positioning. While no one wants to carry too much inventory, having extra inventory of mission critical materials (eg. Strategic National Stockpiles) is a great investment.
- Supply Chain Simplification. Now is the 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.
- Digital Supply Chain Visibility. The backbone of a Digital Supply Chain is the end to end electronic connectivity of every part of a Supply Chain. This connectivity enables real time visibility to what is going on in any Supply Chain, and hence enables real time decision making. Investing in Digital Supply Chain technologies is critical for future success.
- Skills Development. While expediting and fire-fighting are necessary tactical skills to restore supply, investing in higher level skills development in your employees is more important for long term survival and growth. Equipping your employees with skills and experience in holistic end to end Supply Chain oversight and management will complement the technical investments in a Digital Supply Chain.
- Disaster Planning. The pandemic has caused people to either dust off old Disaster plans, or wake up to the fact that they had no disaster plans. Now is the time to learn from the real life, and real time, experiences of the pandemic and create or shore up those plans. Further 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 readiness and action plans are essential.
- Accept the New Normal. If you think things are going to go back to the way they were then you need to get over it. Assume for the foreseeable future that we will be living with this new pandemic induced reality. Reassess your organization, policies, processes, talent, Supply Chain design, and investments with a new lens. A lens coloured by the impacts of the pandemic and the new normal it has brought about.
The second wave is coming, if it is not already here. To ignore it, or to assume that the worst is behind us, is a false assumption.
We also run the risk of becoming complacent over time. It can be natural to start to relax and forget the horrific experiences that the coronavirus pandemic brought about. To forget would be to invite a repeat of the past.
History does repeat itself, unless we take actions now to improve our readiness. Supply Chain was at the epicentre of the pandemic impact. And it will be again unless we take steps to improve the robustness and resilience of Supply Chains everywhere. Let’s ensure we follow these Supply Chain priorities.