Restarting the Supply Chain
Closing supply chains was easy. Starting them up again is much more complex.
Restarting the supply chain is a complex task. Many businesses are finding that restarting operations around new COVID-19 health and safety practices are affecting both capacity and productivity. Not only that, but international businesses are attempting to restart with many countries at different stages in the lockdown lifecycle. To aid business’s adjustment we suggest considering six factors to reduce risk while keeping your supply chain coordinated, as products and materials start to flow.
People and safety
Due to the global scale of COVID-19, employee wellness is a top priority. As business’s prepare to return to work, they need to balance costs with new safety procedures.
- Should adhere to strict cleansing routines,
- providing personal protective equipment, and
- ensure social distancing.
These restart changes will require regular employee communication and it is very important for organizations to strive to remain flexible as they adjust to the ‘new normal’.
Materials and Supplier risk
Pre-pandemic, supply chains focused on reducing cost by resourcing to low-cost countries, with minimal consideration of the risk. However, the trade-off between cost and risk has shifted. New criteria are quickly becoming important considerations:
- impact to critical business operations,
- flexibility of services
- assessing third-party, and fourth-party risk.
Many larger companies or supply chain integrators are finding the production chain needs to be protected. Organisations in stronger positions are now:
- offering their suppliers financial help with liquidity/cashflow,
- changing payment terms
- paying for goods upfront
- providing low-interest loans
This is to ensure to key suppliers in need of support are given the aid they need, in exchange for supply stability. Increasingly, many companies have experienced problems sourcing required materials/services and experienced delays or inflated prices. Allocating resources to this issue is critical to enable successful supply chains and ensure their resilience.
International Trade
Logistics and transportation have become increasingly disrupted. Borders have been closed and internal movement has been restricted across the globe. Freight costs on some routes have more than doubled since the pandemic began. Businesses are shifting their focus within contractual terms to better influence the balance of risk between vendors and buyers:
- deliberately spelling out liabilities due to transport changes to accommodate social distancing or
- clarify costs incurred when/if issues occur.
Many companies are looking to shorten supply chains or source secondary manufacturing locations reinforce their ability to meet consumer demand.
Customers and Demand
In part, today’s supply challenges are demand-led. New demand patterns continue to emerge and will require the ongoing assessment of sales and operating plans. Organisations should:
- re-evaluate inventory allocation ensuring critical customers are prioritized.
- understand whether customer demand signals are reliable
- understand that offering too wide a range of the wrong products and services is often not profitable
Global and regional supply chains – and alternative suppliers and modes of transportation – must be examined according to trade-offs on needs/cost/service/risk analysis.
Operations and Maintenance
To ensure unused or new assets are ready to start with demand, supply chain leaders must:
- refresh manufacturing and distribution capacity – both within their organisation and with third-party providers
- allocate capacity based on customer needs, availability of parts, and production efficiency.
- prioritise when customer needs change or with changes in the availability of components.
Ongoing Resilience
It is essential companies build plan’s even with uncertainty. Will there be further impact with the second COVID-19 spike’s occurring towards winter? Will the development of a vaccination change things dramatically? Multiple scenarios must be built with impacts outlined, including an action plan for various projected outcomes.
Utilising Incident Management Technology to re-establish your supply chain?
Around the world, supply chain leaders are reassessing and trying to forecast what the future may bring. This means working with current supply chains to improve the efficiency and security of supplies while also finding new suppliers and routes that allow diversification in times of crisis. Companies that can stabilise their supply chains and provide structured responses to future risk will be in a position to ensure resilience.
“Using critical event-focused software will support best practice for many employers who are closely monitoring their workforce during this transitional phase. Swiftly gaining a real-time understanding of ‘organisational health’ is important.” Riz Omar, COO of Locate Global.
Incident management technology enables companies to make informed decisions based on real-time insights. The reporting function itself combines data and behavioural statistics, thereby helping organisations to track progress on company-wide critical operational changes.
It’s possible to maintain full visualisation of all users during the recovery phase and ongoing operations. Having clear lines of instant communication is critical for supply chain resilience. Mass notification with incident communication enables business entities to send notifications to individuals or groups, in turn keeping all stakeholders informed before, during and after critical events.
With so much at stake, for employees and for business continuity, it’s critical to get the restart right. To book a demo visit https://locate.global/uk/live-demo/. Restart the supply chain with confidence.