While suppliers have tough choices in front of them, there are steps they can take now to navigate this dynamic environment and position themselves to better manage the risks sure to emerge in the weeks ahead. As President Eisenhower said, “Plans are useless, but planning is indispensable.” Supply chain professionals across all industries should remember these steps as the pandemic’s ripple effect grows.
Understand future requirements and prepare to improvise.
How will demand for your production change in the short and long terms? Learn what you can from outcomes in other countries to identify and focus resources on critical dependencies. In some cases, it may take creative problem-solving to adapt resources. Manufacturing lines can be repurposed, as we have seen with LVMH shifting perfume production to hand sanitizer. Animal ventilators could be modified for COVID-19 patients to help healthcare facilities provide lifesaving treatment. With the prospect of the federal government invoking the Defense Production Act to increase availability of critical resources such as ventilators, organizations should be thinking about how to improvise nontraditional solutions from existing resources.
Maintain dialogue with suppliers to reduce uncertainty.
Engage suppliers as far down in your supply chain as possible, even to the raw material level, which is often overseas. Knowledge of when and how your suppliers may be affected—anything from limited material availability to factory closures to longer lead times—will expedite risk identification and help forecast when your operations may be disrupted. Whatever information you gather will make your planning and risk management more effective.
Capture lessons learned now and prepare to invest accordingly.
Knowledge management is critical to planning. Continue capturing lessons as you go via planning documents, actions, and costs (including time and resources) to understand your total investment in the response. When normal business operations resume, perform a comprehensive assessment while the lessons are fresh and use that knowledge to invest strategically. Given the extraordinary disruptions experienced thus far, investment that strengthens resiliency in difficult times will be a bargain at any price long term.