May 29, 2020 Managing Your Supply Chain Amid the COVID-19 Pandemic

In addition to the staggering revenue declines, loan defaults, and job losses, COVID-19 has uniquely impacted supply chain management.

Simply put, there is no one-size-fits-all supply chain solution for this pandemic. Photo: © Production Perig stock.adobe.com

By Colin Oddoye

The Coronavirus pandemic is an unparalleled modern health crisis with repercussions that reach every facet of the global economy. In addition to the staggering revenue declines, loan defaults, and job losses, the COVID-19 crisis has uniquely impacted supply chain management.

By mid-March, more than 75% of companies reported significant disruptions to their supply chains, a number that’s undoubtedly increased in the past month.

Amid the chaos, experts have outlined various approaches for managing operations in a way that will allow them to emerge from this crisis intact. This includes keeping people safe and connected, conserving cash, responding with agility, and more.

It is essential however, to recognize that the COVID-19 pandemic is not just the most devastating in modern history, impacting different people and different locations in unique ways. It also requires the most nuanced response from business leaders.

Simply put, there is no one-size-fits-all supply chain solution for this pandemic.

Different Industries. Different Concerns.

Business leaders across all industries need to gain a clear understanding of their new operating reality while applying the plethora of advice (like that being doled out here) only as it fits their respective needs. Notably, since the on-the-ground reality is continually in flux, they need to apply an evolving view of their operations that accounts for a rolling 15, 30, 60, and 90-day horizon, maintaining a clear view of both the immediate concerns and future opportunities.

Unfortunately, this outlook is anything but standardized.

Different industries, and even segments within those industries, are experiencing unique circumstances that dictate their response to the COVID-19 outbreak and the related economic shutdown.

For example, while many production lines have ground to a halt, grocery businesses are booming, requiring manufacturers and supply chains to account for surging demand for critical goods. In contrast, clothing retailers likely have seasonal lines that are overstocked, leaving them with an abundance of a time-sensitive product even as they plan ahead for fall and winter inventory that will be in-demand when business returns.

The challenges reach all the way down to the distribution and fulfillment centers. Leaders must grapple with critical questions, including:

• How much prep time is now required for sanitizing MHE controls and for shift handover or start-up?
• What impact will mandatory wearing of masks and other protective equipment have on established workflows?
• How will workspaces need to be reconfigured to account for the likely continuation of social distancing guidelines?

Taken together, it’s clear that supply chain leaders will continue to be tested like never before. To support their efforts, consider implementing the priorities that matter most when navigating the COVID-19 pandemic.

Guiding Principles

Undoubtedly, a nuanced, individualized response plan is the path forward. However, along the way, these practices can serve as a lodestar for leaders trying to see their supply chains through this moment.

#1 Prioritize safety throughout the supply chain. The health, safety, and well-being of every person on the supply chain needs to continue to be a top priority. Not only is it morally imperative, but nothing will set back supply chain management like a COVID-19 outbreak within the chain.

#2 Conduct fluid risk assessments. The COVID-19 pandemic is making new meaning of the term “agility.” What was once a buzzword for business transformation has become an imperative priority for supply chains looking to navigate this time successfully. By continually and aggressively monitoring the supply chain for potential disruption, leaders can stay a step ahead, ensuring continuity at a time when it is desperately needed.

#3 Increase visibility. Now is the time for supply chains to reap the benefits of the technology investments and IoT integrations that have defined the last several years of supply chain management. Use this technology to identify bottlenecks, avoid COVID-19 hotspots, and provide unparalleled security when bringing products to market.

#4 Diversify geography. Even as large swaths of the US and Europe are enduring months-long lockdowns, other parts of the world are opening. Wuhan, China, where the virus originated, is open for business, and countries around the world are at various stages of returning to normal. If possible, alter the supply chain’s geography to mitigate exposure to COVID-19.

#5 Stay focused on the future. We are living through historically dire circumstances, but there is plenty of evidence – both historical and scientific – that offer hope for the future. Therefore, even as you do the hard work to make sure that your company sees the other side of this pandemic, keep one eye on the future. It’s both a hopeful destination and a mission-critical outcome for supply chains that will thrive in a post-COVID environment.

In the months ahead, companies will strive to adjust to the new realities posed by COVID-19. However, as the saying goes, “cooler heads prevail.” Business leaders must assess advice through the lens of their unique circumstances and make thoughtful decisions that will best support their operations moving forward.

Our current world is not easy or simple, but with fortitude, we can persist and even thrive.

Colin Oddoye

Colin Oddoye is a supply chain specialist with Myrtle Consulting Group.

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