During times of uncertainty, such as the Coronavirus (COVID-19) pandemic, businesses often stick to their “rose-colored glasses” strategy. Business leaders often ignore the early warning signs and are ill-prepared for the storm that lies ahead. But how do you exploit uncertainty?
Complex and global supply chains are always subject to disruption but the Coronavirus (COVID-19) is a whole new kind of disruption. Supply chain risk management instantly came back into focus in early 2020 due to the Coronavirus (COVID-19). As the Coronavirus crisis continues to take its toll on humanity, critical supply chains for medicines, personal protective equipment (PPE), medical devices and other essentials are also being dramatically impacted. It’s clear that noneconomic disruptions are on the rise.
3 Key Factors that minimize the damage of Coronavirus related supply chain disruption
Supply chain management teams should be able to combine external and internal data to act quickly and reduce or eliminate the impact of a disruption from the Coronavirus.
- Supply chain structures need to be agile and transparent in order to respond fast to severe market situations resulting from the Coronavirus. Transparency across operations of an organization, along with coordinated departments with clear responsibilities, can accelerate action and reduce misunderstandings and confusion when a disruption takes place.
- Management teams across the supply chain should pursue a balance between cost efficiency and operational effectiveness. Diversification of suppliers and market locations provides companies with ability to not be solely dependent on a supplier and also not to endanger the whole company in case of a pandemic. Additionally in this way companies have reinforced buying power and can reduce their costs.
- Supply chain managers could share strategic stocks, or proceed to joint supply agreements in order to maintain operational effectiveness even in case of a pandemic. They can also plan and agree on ways to access critical stocks such as medical supplies.
Conclusively, realize that building resilience across the supply chain and developing advanced info-sharing systems among governments, companies, and consumers are both successful business practices and effective preparedness actions. It is crucial for organizations to develop a culture of supply chain risk management and warning systems across different supply chains. Companies that undertake such measures for supply chain resilience will not only survive the Coronavirus pandemic better from disruption, but will manage to leverage crucial competitive advantage from such events.