If anyone had to define the year 2020 in one word, it would be “COVID-19”. We have stepped on to the middle of the year, but people are still struggling with novel coronavirus infections and lack of proper treatment. There have been lockdowns, unlock, and re-lockdown phases as well. And the virus hasn’t just affected life, but also the world economy and various industrial sectors.
The OECD (Organization for Economic Co-Operation and Development) alerted that the COVID-19 carried all the probable chances of reducing global economic growth significantly. Industry and company fallouts were also predicted. The world witnessed both since the beginning of 2020, until now. The supply chain also got affected considerably and needs to get corrected using proper guidelines.
Michael Giannulis tips for proper supply chain management during COVID0-19
The international economy and global markets suffered a downfall due to the novel coronavirus, which initially originated in China. Gradually, it spread to other countries like Europe, Asia, the Americas, Middle East, Australia, and many more. This spread was despite the quarantines and social distancing. It has reduced global business revenues, suspended business operations, and disrupted the comprehensive supply chain management.
Hence, companies must invest in smart supply chain management tactics to survive any crisis, like the COVID-19. Michael Giannulis, an entrepreneur shares crucial guidelines for this:
- A contingency plan is a must
Companies and business houses of all sizes need to get started with their scenario-planning policies. It needs to get done, keeping in mind the various business demand platforms and assessing the overall supply chain. Since multiple companies are witnessing critical, “one of its kind” risks, organizations need to plan for conservative and optimistic situations. For instance, when you concentrate on COVID-19, it gets outlined as:
- Conservative scenario –The global pandemic stays prevalent and keeps on impacting that last till Q4 of the business cycle.
- Optimistic scenario – Since the novel coronavirus got spread extensively during April/May, there might be an estimated normalcy in international operations when the Q2 business cycle ends.
- Effectively monitor demand volatility
It focuses on short-term business goals. Here it becomes crucial to stop all product prioritizations and promotions. Instead, it’s smart to generate inventory reserves and various other strategies to cater to the demand during scarce supply. According to the latest research reports, the scales of surgical masks, oat milk, first-aid kids, and various other non-perishables increased during February 2020 as a response to the pandemic fears. Hence, there will be panic purchasing that will increase the demand, leading to cost gouging for online and in-store products, as the supplies will be less.
Other brands are gradually playing the part of an accountable retailer. Several global brands have taken part in the “Feed the Nation” contingency plan and are working closely with the suppliers, to manage demand. Simultaneously, they are also creating a favorable brand image in their customer’s minds.
Also, during the mid-term, the organizations must decide on the “bull-whip” effect. It is certain to impact their suppliers and business because of increased volatility. Companies should also connect the supply to customer demand within their business and enable trustworthy suppliers to have complete demand visibility. And on a much wider scale, the AI (Artificial Intelligence) and ML (Machine Learning) demand planning tools that use the big data sets, need to get leveraged to collective metrics. It can be used to decipher the seasonal shopping trends of customers, which will help create robust predictive models as a company prepares to cater to the increased demand, while things gradually return to normalcy.
- Resolve the supply shock
The companies must keep working on their current business continuity plans in the short-run. They need to work in co-operation with their existing suppliers for generating a business continuity model. Businesses must also recognize the suppliers in multiple regions to diversify the supply chain and secure the company against shortages. It is valid for the products that have longer supply cycles.
Market experts and business analysts suggest that companies with connection and exposure to China are likely to witness lengthier time between the demand and delivery timelines, which could be anything between one to three months. Here the company’s business model must enable buffering with extra inventory.
Balancing flexibility and sourcing resilience with the expense is on the list for several retailers. Where companies want to be distinctive and offer customized products, there is a scope to source from off-shore and near-shore regions. The COVID-19 spread might be yet another cause for the retailers to think about working on increasing supplier flexibility.
Last but not least, collecting data from the third-party partners enables the visibility into a stock movement across supply chain groups. It can suggest probable issues as well. For instance, when the inventory gets delayed, the companies can place contingency plans for addressing the problems and speed up the outcomes.
- Making work secure
Do you have employees in your company who manages delivery, logistics, and food? If yes, then you need to provide him with security devices. Ideally, you need to invest in PPEs (Personal Protective Equipment), as it will help the customers and workers to remain secure in such a crisis. You might want to spend, and stock up added PPE supplies quite early. It will enable you to resolve the shortage that might come up later, because of panic buying.
Also, the technology, for instance, employee applications and internal third-party logistics, can be used to manage staff accessibility and shipment choices. It can also help to streamline onboard processes for brand new workers. If you want you can also get new staff on board. But for this, you need to train them and check if they are all set to carry out the work. For this, you can use assistive intelligence technology with the promise of a secured environment.
The supply chain is a crucial part of your business and ensures business continuity if managed correctly. The guidelines mentioned above can help you manage your supplies and carry on work during a crisis.