Is Your Supply Chain Resilient? How Manufacturers Can Map Dependencies and Minimize Risk During COVID-19
The COVID-19 pandemic has dramatically disrupted many global supply chains, and there is no way of knowing when the disruptions will peak or begin to return “normal.” Presently, the focus on public health and welfare is paramount—the ability of nations to contain the pandemic comes first. But the health of the global economy is also critical. Therefore, the approaches that organizations take to create more resilient supply chains will be essential not only to their own survival, but to the global economy in the long run.
In a global economy, every organization is connected to, or dependent on, others. You may not be directly affected by the pandemic yet, but one or more of your vendors at a critical point in your supply chain probably already is. Understanding your dependence on entities outside your organization is critical. Are your critical third parties (suppliers, vendors, service providers, etc.) prepared?
Steps for Minimizing Risk
It is important for manufacturers to protect operations and ensure continuity of services or products to customers. Take the following steps to keep operations running:
- Map your dependencies to understand where disruptions might impact your value chains. There is no one system that can find everything at once. But you can start by following any business continuity management (BCM) process to assess locations and processes.
- Review the preparedness of your critical third parties (suppliers, vendors, service providers, etc.), possibly to the 4 th or 5 th levels of your supply chains. This may be difficult initially because some or many suppliers may have temporarily or permanently shut down. But at least you will gain a better understanding of what lies ahead.
- Identify single points of failure in your ecosystem. If a bottleneck is occurring at a manufacturing plant in country a, is it possible to fill the gap from plants in countries y and z?
- Assess the amount of time before the actual impact to your ecosystem. What is your current strategy to deal with a disruption to your supply chain? The best strategies will result in the least disruption to your operations.
- Your business unit managers are your first line of defense; ask them: Do you have the appropriate tasks documented to execute the strategy? Are there clearly defined teams with the roles and responsibilities necessary to execute these tasks?
Conduct Walkthroughs with Each Team
To test your readiness, conduct walkthroughs of the tasks with the appropriate teams, ensuring everything is properly documented at every step. With much of your workforce self-isolated and some possibly incapacitated, do you have access to the information necessary to make decisions quickly? The faster you can respond, the more effective you will be at minimizing any impact.
You should also conduct walkthroughs and other practice exercises throughout the crisis period. This is the best method for identifying gaps in your procedures and will give you the highest chance of successful execution. Active participants will become familiar with the goals and objectives of the plan and begin to use it as guidance rather than a prescriptive list of tasks to be followed without applying rational thought. Practicing the execution of your plan ensures all necessary parties understand their roles and responsibilities.
Assess Your Tool Set
Finally, assess the tools used to maintain relevant information and assist in the execution of your plans for supply chain resilience. Old technologies and obsolete tools will put successful execution of even the best plans at risk. Identify any deficiencies in the tools you have available and create a comprehensive list of requirements that will enhance your ability to execute. The sooner you begin to upgrade your tool set, the sooner you will be able to reduce your supply chain risk. At some point we will see manufacturers approaching production goals again, retailers nearing sales targets and airlines filling seats once more. These will be indicators that the global economy is returning to normal—or maybe a “new normal.” Your supply chain management best practices will have a role in how soon that happens.