Insights

Post COVID-19 World: How Supply Chains are Evolving

In this post-COVID-19 world, organizations must redefine their goals, strategies, organizational structures and business processes in order to stay alive.

From footprint and layout to social distancing process flow optimization, businesses must re-evaluate their current processes and adapt if they want to survive the effects of this pandemic. They will also need to establish these protocols for the future – if and when something like this were to happen again.

As a business, you must remain engaged and align your culture post COVID-19 so you will never get caught off guard again. Supply chain consulting can help you align those strategic planning tools within your culture so as to minimize the possibility of error and minimize the impact of the unavoidable.

How Can You Respond?

Organizations can do a number of specific things to respond to the immediate change, as the threat of COVID-19 spreads, in order to safeguard their supply chain operations.

If you operate within impacted countries, you can:

  • Train employees on coronavirus on symptoms and prevention
  • Establish screening protocols
  • Prepare for an uptick in absenteeism
  • Enforce non-essential travel
  • Offer flexible working arrangements
  • Focus on cash flow
  • Align IT systems and support to be comp work requirements

If you produce, source or distribute from suppliers in impacted countries, you can:

  • Augment focus on workforce planning
  • Hone in on Tier 1 supplier risk
  • Highlight the extended supply network
  • Activate alternate supply sources
  • Update inventory policy and planning protocols
  • Expect plant closures
  • Focus on production scheduling
  • Determine alternative outbound logistics options 
  • Perform global scenario planning

If you sell goods to impacted countries, you can:

  • Know the demand impact unique to your business
  • Strategize short-term demand-supply synchronization 
  • Prepare for channel shifts
  • Determine alternative inbound logistics options
  • Open up channels of communication with top customers
  • Prepare for a rebound
  • Perform global scenario planning

In the end, a new supply chain model is imperative if you are to survive this crisis. Many businesses are unaware of how vulnerable their supply chains are to global shocks such as this, as they have been focusing all along on supply chain optimization to cut costs, reduce inventories, and increase asset utilization.

It becomes increasingly important to explore new supply chain technologies that can drastically improve visibility across the supply chain, while supporting your ability to deal with the unexpected – whether “black swan” event like COVID-19, act of terrorism, trade war, regulatory change, supplier bankruptcy, labor dispute, or sudden spikes in demand.

Being Prepared is Key

Supply chains in general are indeed quite flexible; however, no one was really prepared for an event of this magnitude. According to a survey by the Institute for Supply Management, nearly 75 percent of companies reported supply disruption and 44 percent of them did not have a plan in place to address this kind of disruption.

So, what lessons can be learned by this “new normal,” and what does that mean for future supply chain development? There will an increased need for synchronization and greater automation as businesses realize how vital a sustainable, successful supply chain is to their growth and stability. 

If there’s one thing we have learned so far from all this is that there is a mission-critical need for intelligent workflows backed by data and demand insights. That is how you as a business will be able to fill in the gaps left by the pandemic, as you are able to emerge stronger than when you went in.

At the very basic level, you have to start by considering the flow of people. This includes:

  • Implementing new processes for entering and leaving a facility
  • Outlining plans for keeping people and workspaces clean at many points during the course of a day. 
  • Identifying ways to change the flow to adhere to social distancing guidelines, in places where people tend to congregate.
  • Re-engineer common areas and activities to consider entry and exit, time entry, meetings, and lunch breaks.
  • Establish new shift schedules, work arrangements, or work zones that ensure people are kept separate. 
  • Educate and train staff on the procedures necessary to keep themselves and coworkers safe.
  • Make infrastructure changes to support employee safety, facility cleaning and maintenance, and how work will be conducted going forward. These can include additional hand-wash stations, clear work zone signage, and storage for new protective equipment.
  • Analyze the way in which people flow through your facility so you can better identify risk areas, then re-engineer that flow to reduce risk.

In general, you need to take a three-phase approach: #1, respond; #2, restart; #3, be ready. Just as important as the procedures you’re putting in place to weather COVID-19 is the promise to align your work culture to embrace change well after the pandemic.

Contact Incito Consulting Group

Need a strategic planning tool that can help you weather the post COVID-19 world? Incito offers lean supply chain consulting for businesses. Learn more when you call us at 866-697-LEAN.

Want to learn more? Schedule a consultation.

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