There has never been a moment in time since the second world war, that there has been so much global awareness and need for resilient and dynamic supply chains, and the qualified Supply Chain professional is there to manage them; in a single strategic battle toward a common enemy.
The COVID 19 outbreak was initially concerning to firms with established supply chains embedded throughout China, but it’s clear now, that it’s effects are going to be far more reaching on a global scale, and felt throughout the months and year(s) ahead.
In my job, I have the privilege of constantly speaking with dedicated supply chain professionals globally. From the woman director controlling over a half a billion dollars worth of global spend in the fast moving consumer goods industry in the ‘big city,” to the little guy ordering replenishment stock for a small chain of regional tire repair shops in Piqua, Ohio.
Lately, they’ve been asking the same question: “What are we going to do?“
So whether you are quarantined and idle at home, or your employer is an essential service and you’re confined to toiling behind a desk at work, here are some DO’s and DON’Ts specifically for supply chain professionals that you should consider – NOW.
Identify how your firm’s production capability and equipment can be retooled to produce hand sanitizers, gloves, gowns, face masks or shields, medical supplies or other vital equipment. There is still a need, and will be for quite some time. Who knows, by doing so, you’ll not only be helping front line workers and healthcare providers, you could also get your firm re-classified as an essential service, kick starting idle production lines, and help your fellow employees get called back to work and earning a steady income again.
Identify where in the supply chain your firm may have spare capacity, to assist in National/Regional relief efforts. It’s not only physical commodities that are in need, it could also be transportation, distribution, or even warehousing related space or activities to move vital supplies and equipment around.
Review your entire supply chain – top to bottom, to evaluate where problems are arising and you’re vulnerable, opportunities which may be presenting themselves, and develop a status report and comprehensive supply chain action plan for management.
Revisit your disaster contingency plan and develop a new one, specifically including virus and pandemic related situations. (This wasn’t our first, and certainly won’t be the last pandemic.)
Review your firm’s supply chain exposure and resiliency to recover from natural disasters and pandemics, and the preventative measures that you can design and implement now, to cope with swings in stock availability, transportation, and security issues and evaluate potential recovery times.
Review all your existing contracts for force majeure (unforeseeable circumstances) clauses; and determine which of your suppliers may be in a position to try to enforce them – leaving you vulnerable to disruption and stock outs. Develop solutions.
Check to see if your firm has insurance protection covering any losses, should your supplier(s) not be able to fulfill their contractual obligations.
Reassess your current supply chains in China, India, and other global hot spots. Consider other possible regional opportunities for the future (such as Vietnam, Bangladesh, etc.), as contingencies, as these countries have been working to improve working and business environments recently.
Increase your level of communications and collaboration with overseas suppliers to understand not only their challenges, but monitor ongoing labor, discriminatory wage practices and health and safety regulations as well. These have led to manufacturing, transportation, and other related strikes and protests. Keep in mind that political protests that disrupted business recently were not limited to strictly Hong Kong and China, but also happened in Latin America, Middle East, Brazil, India and Mexico as well.
(Yes, do a deeper dive and move toward becoming a ‘Geopolitical Specialist’ when analyzing regional risk in your global supply chain.)
Ask all vendors about their plans on dealing with demands and changing capacity, and how swings may impact their stock availability, quality, increased production and delivery times, and their labor force.
Sharpen the saw. Take the time to invest in yourself and consider taking online courses in the Supply Chain field, such as those offered by authoritative sources such as Supply Chain Canada (www.supplychaincanada.com). They can help with strategies and possible solutions to supply disruptions during challenging times (and yes, they have a new offering dealing with the COVID 19 outbreak). Perhaps use the time to finally finish your study toward the Supply Chain Management Professional (SCMP) accreditation?
Catch up on your supply chain reading with issues of Supply 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 industry themselves; who are guiding their firms and making a difference in the supply chain community. (COVID 19 whitepapers are available too.)
Don’t wait to step up or be asked for your supply chain expertise, your firm’s production abilities and it’s logistical capacity and how they can be used to keep critical supplies and support services open to front line workers and healthcare providers struggling in your communities.
Don’t take a ‘wait and see’ attitude and hope that another major disruption to your supply chain doesn’t occur again in the future… it will. Learn from today, plan and prepare for tomorrow.
Don’t lessen your due diligence when sourcing urgently needed supplies -via new or potentially alternative sources of supply away from China, Asia, or other parts of the globe experiencing problems. Beware that counterfeit markets thrive in times of crisis; and quality and social responsibility risks should also be considered in addition to simply cost and immediate availability. Now is the time to increase efforts to protect your firm and supply chain; not lessen or weaken it with quick or cheaper sounding alternatives.
Don’t forget the potential to accidentally involve your firm in forced and/or child labor, poor working conditions, other human rights abuses or environmental concerns; when pre-qualifying any new and potential vendors. Practice responsible and ethical sourcing.
Don’t immediately threaten legal action against suppliers (local or distant) caught in a bad situation and who attempt to enforce the force majeure clauses within their contracts. Work with them to determine a reasonable course of action instead. Right now cooler heads should prevail and honest transparency about their situation and capabilities, shared with you – as partners and lenders, is of paramount importance, if you’re going to get through the storm.
Don’t participate in the hoarding, resale, or profiteering from food, cleaning and medical goods, protective equipment and other essential items which could be redirected and used in the production of medical supplies for front line workers in your community. Whether personally or on behalf of your employer – it’s just not right.
Don’t wait for authorities to enact and enforce new sweeping regulations controlling the supply chain. Lend your knowledge and expertise and see how you and your firm might participate in local supply chain professional coordination units, to ensure the public’s safety and the continuance of a strong and resilient supply chain of much needed food and medical goods and services.