Supply Chain Should Lead the Boardroom … the Coronavirus Proves it!


The Coronavirus situation has now been declared a pandemic. With over 750,000 cases, over 36000 deaths the expectation is the number of infections will continue to grow at an incredibly rapid rate.

Countries and companies are taking extreme measures. Millions of people have been quarantined, travel has been restricted if not prohibited, and events of all kinds are being cancelled or deferred.

The economic and Supply Chain impact has been, and will be, enormous with employees unable to work, factories shut down, and modes of transportation idled in record numbers. It will take enormous intelligence and expertise to get the Supply Chain back on track throughout, and after, this crisis.

Supply Chain leaders now belong at the head of the Boardroom table like never before.

Disruption of all Supply Chains

The Coronavirus pandemic is of ultimate concern, most significantly as it impacts the health and well being of our fellow human beings.

The fallout from the Coronavirus has been disruption of the Global Supply Chain in virtually every industry. This disruption has been rapid and profound.

With China as both the epicentre of the Coronavirus outbreak, and the largest manufacturing output country in the world, the disruption to the manufacture and disruption of goods originated here. Closure of factories in order to quarantine employees has dramatically reduced production of goods.

Additionally the lack of availability of goods to ship, and the spread of the actions to contain the virus in the transportation sector, have drastically reduced the amount of goods being shipped to points of demand.

Consider that over 90% of all goods are shipped over the ocean. With fewer ships and goods arriving in destination ports around the world there are fewer goods to be further transported by truck or rail. With short Supply Chains and low inventory levels it is reasonable to expect that inventories will be depleted in many industries and retail sectors.

In the short term air freight of goods out of China, while more expensive, has been an alternative to move goods and cut down on transit times. But with increasing restrictions on air travel that option may be curtailed.

Now consider that the Coronavirus, and all containment actions being taken, are indiscriminate. That means that all Supply Chains are impacted, including those supporting the healthcare and medical industries, the cornerstone of addressing the virus in the first place.

Needless to say the amount of Supply Chain disruption is monumental.


The Importance of Supply Chain Unmasked

In the wake of this disruption people should now understand how important the Supply Chain is, along with how important the Supply Chain professionals are that run it.

The old, antiquated notion of Supply Chain as some necessary and unimportant back office function should now be dispelled. No longer can Supply Chain be viewed as the transactional function that just places purchase orders, arranges freight, and physically moves goods.

Supply Chain is the strategic engine for making every industry operate and for making the global economy run.

Supply Chain is so much more than the transactional function of the past. Supply Chain designs the supply network, does the planning, manages supply and demand, drives technological direction and deployment, and enables all corporate and economic requirements.

Without Supply Chain leadership, at the Executive level and in the Boardroom, there is no way for any company to work their way out of and through this crisis. Supply Chain is of paramount importance in developing and implementing tactical and strategic plans to mitigate risk and navigate through the global pandemic.

Supply Chain is the strategic engine for making every industry operate and for making the global economy run

Supply Chain Game Changer

Supply lines must be restored, expanded, monitored and changed in real time. Sourcing strategies must be altered to develop parallel supply chains to create dual sourcing networks. Logistics modes and options must be devised and actively managed. Inventory levels must be optimized across all channels and at all points of the Supply Chain. And end market demands must be fulfilled with unprecedented sensitivity to and awareness of specific market needs.

Supply Chain preeminently must navigate through this current crisis and implement the strategies to mitigate the impact of any such similar crises in the future. Supply Chain professionals and leaders have the knowledge and expertise in this area unlike no other, and are uniquely qualified to provide the tactical and strategic response we now need.

Smart companies, and smart governments, should be putting their Supply Chain leaders at the head of the Boardroom table. They should be in charge of the war room like activities to get on top of, and ahead of, the current crisis.

Supply Chain in the Boardroom

The disruption of the Supply Chain as a result of the Coronavirus has been swift and pervasive. That fact alone should reinforce the importance of Supply Chain leadership in getting through this global crisis.

Supply Chain leaders belong at the head of the Boardroom table!

Originally published on March 31, 2020.