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How to Prepare for Major Supply Chain Disruption

How to Prepare for Major Supply Chain Disruption during COVID-19

Richard Gall
by Richard Gall — 4 months ago in Supply Chain Management 4 min. read
1626

Globalization has made the world strong, a move that has profited businesses all things considered and enterprises. With various global supply chains, your Business can invigorate development by decreasing costs, expanding volume and improving proficiency.

Be that as it may, globalization likewise accompanies dangers. In the event that your organization or business relies upon a system of providers around the globe, your supply chain is constantly defenseless against disturbance from factors beyond your ability to do anything about, similar to natural fiascos, taxes, deficiencies or geopolitical conflicts.

According to a survey conducted by the Institute for Supply Management (ISM) from February 20 to March 7, nearly 75 percent of US businesses have experienced supply chain disruptions due to COVID-19. You are probably already seeing results that affect your company’s labor, materials, transportation, or consumer behavior.

The current crisis is a warning to all business leaders that disruption will occur, and we must be prepared with flexible and adaptable contingency plans. I met Rodney Manzo, Chief Executive Officer of Envil and Mike Corbo, Chief Supply Chain Officer at Colgate Palmolive, to discuss what every business leader needs to know about supply chain management in this dynamic environment.

 Here are five steps they recommend to navigate the current crisis and strengthen your supply chain for future challenges.

1. Plan for supply chain disruption.

Unfortunately, threats to supply chains are unavoidable. Learn to expect the unexpected, be it a virus, a storm or a strike. Develop a robust backup plan – or ideally, multiple plans to overcome unexpected obstacles. When a crisis affects many regions of the world, it can be difficult to predict when and where it will end. Be prepared for many stages of upheaval, and try to stay ahead of the next possibility.

When the coronavirus first hit China, we were able to react quickly and start a contingency plan within a day.
Corbo

“Communication was going out to plants in Latin America to start supplying toothbrushes to Europe, America and China. But as the virus spreads to Europe, America and other parts of the world, China We will have to face this crisis soon. We were supporting China a month ago, but now China has to start supporting other places. Each new phase of a crisis Make your supply chain tight enough to cope with. ”


2. Develop different levels of contingencies.

Different circumstances call for different responses. If your supply chain has a global footprint, think of your backup plan as a series of contingencies with built-in capacity. Build a crisis management team that is responsible for evaluating priorities, weighing tradeoffs, and looking at contingencies.

Be especially cautious about single-source suppliers when making contingency plans. In case of emergency, can you keep additional inventory from that supplier as a buffer? Can you require a single-source supplier for production in two different locations? Make it your target for the backup source.

“We have various levels we can initiate, contingent upon the circumstance,” said Corbo. “In the event that our manufacturing plants in a single area are undermined, for example, a Level 1 possibility may include making a similar item — like a specific flavor toothpaste — in an alternate area.

On the off chance that the circumstance raises and various manufacturing areas are inaccessible, Level 2 may mean we don’t approach precisely the same item, yet we can get a comparable item from another area.”

3. Update and test contingency plans.

An emergency course of action ought not simply be a paper work out. Make your arrangements living archives that you test, assess and update a few times each year. Direct a preliminary run of your emergency courses of action in reality in any event once per year to guarantee they are as yet practical. Note any vulnerabilities or potential difficulties, and focus on settling them before the following test.

“Envision your essential provider of a specific material gets inaccessible for quite a long time or even months,” said Manzo. “Do you have an optional source set up? How rapidly would you be able to get that provider ready for action, so you have as meager slack time as could be expected under the circumstances?

Test this alternate course of action as a major aspect of your quarterly or mid-year business survey, requesting that your optional provider create and send a restricted shipment to a specific market. The objective is to recognize any feeble connections before they become genuine issues.”
Also read: Top Ways that will Reshape Supply Chain And Logistics in 2020

4. Facilitate real-time collaboration and communication.

Leverage technology to track potential disruptions and share information easily. There are steps you can take immediately to improve the visibility of your end-to-end supply chain and better communicate with your team members and partners.

And start researching more advanced technologies such as those using artificial intelligence or the Internet of Things to make a long-term investment in your company’s collaboration capabilities.

“Cooperation among all its stakeholders is important,” Manzo said. “When your entire team has visibility into your entire supply chain from beginning to end, you are better at identifying trends, forecasting potential problems and finding solutions.

Discover tools such as Slack, Google Hangout, WeChat, WhatsApp and other online platforms that can keep your team and suppliers connected to countries and continents during the crisis. ”

5. Stay ahead of demand.

Demand can be unpredictable during a crisis, and you need to be able to track and analyze it in real time. The demand cycle causes supply disruptions, so keep a close eye on current trends, and follow consumer behavior so that you can quickly redirect product levels based on changes.

“When coronovirus hits and consumer behavior changes, we need to know as soon as possible,” Corbo said. “What we’re seeing now is an increase in demand in the US. People are buying every other thing – toothpaste, liquid hand soap. Over the past few weeks, all major retailers have said without warning that they are using their inventory.”

Want to raise the level for a week. That is going to affect the supply chain. When we are suddenly trying to cover other things, suddenly, here we demand Mr. do not expect. When you think you have a case, you may still be somewhat nimble to be able to change. ”

The current health crisis is still unfolding, and its full impact is still unknown. But you can take steps to strengthen your supply chain and protect your company against other serious disruptions to develop your contingency plans and prepare for the next crisis.

Richard Gall

Richard is senior editor of The Next Tech. He studied International Communication Management at the Hague University of Applied Sciences.

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