Understanding, evaluating and improving your supply chain in the wake of the coronavirus crisis

20 April 2020

COVID-19 has forced both domestic and multinational companies to re-think the way they source materials and supplies in order to get inventory to the marketplace as quickly as possible. But the immediacy of having to act in response to the coronavirus pandemic also affords businesses the opportunity to evaluate and identify inefficiencies in their supply chain so they can implement better operational strategies going forward.

Firms are currently struggling with a variety of issues. One common theme is replacing or augmenting manual processes which are dependent on the action of individuals. For example, manually inputting information—whether it be for purposes of filling orders or completing a multitude of tasks—can get easily delayed and slow the supply chain process. The cause may be that people simply cannot work from home, or perhaps they do not have remote access to the tools needed to fully perform their role in the chain. These are issues that are generally problematic, but heightened even further in a time such as this where businesses are struggling financially.

Disruptions can also occur in one form or the other due to coronavirus-related transportation restrictions, such as a failure to secure materials needed for production, or the inability to fulfil shifting customer demand. Businesses generally know the production and shipment schedules for their tier 1 suppliers, but may not know details of additional suppliers in the chain.

Additionally, functions involving physical acts, such as wet signatures on documents, bills of lading, paper printouts and/or notices that must be filled out by hand, etc. have all been compromised by the coronavirus for safety reasons; but this also demonstrates how dependent on these items/processes the supply chain might be, and how quickly the chain can be halted.

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If companies take the time now to identify where problems or inefficiencies exist in their supply chain, then they can decide how to best address them in the short-term as well as going forward. To get a handle on exactly what has changed and how to adapt, it is advisable to visualise and document core pieces of the disrupted process. Define who does what and when they do it so the entire supply or operational process is laid out, and you can see exactly how things work (or how they’re supposed to work).

If your company’s processes are too reliant on individuals and/or are too hands-on, explore whether any operations can be automated or digitised. If there are issues with access to existing IT systems while employees work from home, look for ways to securely provide your company’s desktop environment to the now-remote workers.

Companies may have resisted digitising their supply chain processes so far, but digitising can help promote not only visibility of the supply chain, but also the ability to better manage risk where data can be available or transferred digitally. With tech advancements are of course security priorities as well, but businesses with strong digital infrastructure are dealing with supply chain disruptions much better than those without during this COVID-19 pandemic.

If you take the time to evaluate your company’s supply chain processes now in order to adapt to the difficulties of the coronavirus, then benefits will be felt well beyond the time governments start operating normally once again. The effort, costs, and time needed to improve your business now can lead to streamlined and sustained operational success going forward.

 

By CJ Stroh, HLB USA

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