by Artur Kolibski, CPIM, President, CEO Entra Group, member of SIM Trójmiasto
Given the global nature of the COVID-19 crisis, Supply Chain problems are vital for all organizations. Your inventory management strategies (if implemented properly) will make you feel confident for a while, but in most organizations these few weeks of relative “controlling the situation” is slowly running out.
The situation is exacerbated by panic purchases that generate a shortage of household goods or food throughout Supply Chain. As the impact of COVID-19 increases, the pressure on the organization’s supply side will increase. What steps we should take to increase planning efficiency and more broadly increase the efficiency of entire Supply Chain?
1. Map and evaluate your Supply Chain. Verify where you have been making purchases so far. Where and how your suppliers or their partners operate to obtain information about the risks you may face. Evaluating Supply Chain is a good practice at any time and should be certainly deepened and further refined when the pandemic eventually.
2. Monitor your situation through ongoing communication inside and outside the organization. If you haven’t done it before, it’s time to focus on collaboration and strong relations with the most important suppliers. Your ultimate success is tied to their success. Cultivate and deepen this activity after the crisis.
3. Define scenario plans. Now you should appreciate your Planning department even more. Ask them to prepare many scenarios answering a wide range of “what if…” questions now so that you have an action plan when they become reality. Verify your planning approach using alternatives. Are you prepared to respond to demand shocks – both positive and negative? Validate your Supply Chain flexibility before it’s too late.
4. Strive for full integration of information and data throughout the Supply Chain. Know what kind of products you have and where it is. Use the analytical skills to e.g. eliminate the impact of the so-called “bullwhip effect”. Keep data and information transparent.
5. Operate on-line, also globally. You don’t want to be the last to know the latest in these demanding circumstances. Put a pressure on you Supply Chain responsiveness.
6. Keep monitoring process performance. Don’t let your organization put away good practices in this area – even if news are bad and results poor. You will appreciate this practice when crisis is over and the results will be getting better. In case you don’t have these good practices in place – use your managers to define and implement process KPIs, there will be time in future for improvement.
In many respects, COVID-19 provides an opportunity to place the Supply Chain at the organization’s strategic decision-making table and to focus attention on the existing processes, e.g. planning. The current situation is also an opportunity to build the Supply Chain even more resilient than it was before. Your customers will benefit from it and as a result your organization will to either.