From the June 2020 print edition
Not since the Second World War has there been such a need for resilient and dynamic supply chains. We’re in a battle with a common enemy – the COVID-19 outbreak – and its effects will be felt for years to come. Here are some do’s and don’ts that supply chain professionals should consider now.
First the do’s …
Identify how your production capability and equipment can be retooled to produce hand sanitizers, gloves, gowns, face masks, medical supplies or other vital equipment. There is still a need and will be for some time. Who knows, you’ll fight the pandemic, but you could also get your firm re-classified as an essential service, kick starting idle production lines and helping fellow employees get called back to work.
Identify where your firm may have spare capacity to assist in national or regional relief efforts. Think outside the box and beyond PPE to also include transportation or distribution services, warehous-
ing space or activities to move vital supplies and equipment around.
Review your supply chain from top to bottom to evaluate where problems are arising and you’re vulnerable, opportunities which may be presenting themselves and develop a status report and action plan for management.
Revisit your disaster contingency plan and develop a new one, specifically including virus and pandemic related situations. This wasn’t our first, and certainly won’t be our last, pandemic.
Review your firm’s exposure and resiliency to recover from natural disasters and pandemics, and the preventative measures that you can design and implement now, to cope with swings in stock availability, transportation and security issues and evaluate potential recovery times.
Review your existing contracts for force majeure clauses and determine which suppliers may be in a position to try to enforce them, leaving you vulnerable to disruption and stockouts. Develop solutions.
Check if your firm has insurance protection covering losses should your suppliers be unable to fulfill their contractual obligations.
Reassess your supply chains in China, India and global hotspots. Consider other regional opportunities for the future (such as Vietnam, Bangladesh, et cetera), as contingencies. These countries have been working to improve working and business environments recently.
Increase your level of communication and collaboration with overseas suppliers to understand not only their challenges, but also ongoing labour, discriminatory wage practices and health and safety regulations. These have led to manufacturing, transportation and other protests and strikes. Political protests that disrupted business recently were not just Hong Kong and China, but also in Latin America, The Middle East, Brazil, India and Mexico.
Ask vendors about their plans to deal with demands and changing capacity and how swings may impact their stock availability, quality, increased production and delivery times, as well as their labour force.
Sharpen the saw. Invest in yourself and take online courses in supply chain, offered by Supply Chain Canada (www.supplychaincanada.com). The organization can help with strategies and solutions to supply disruptions and have new offerings concerning the COVID-19 outbreak.
Catch up with issues of Supply Professional for insights and interviews with Canada’s top supply practitioners. Why reinvent the wheel when you can learn practical information from titans of industry? There are whitepapers available too.
… and now the don’ts
Don’t wait to be asked for your supply chain expertise, your firm’s production abilities and it’s logistical capacity, to keep critical supplies and support services flowing to frontline workers and healthcare providers.
Don’t take a wait-and-see attitude and hope it won’t occur again in the future … it will. Learn from today, plan and prepare for tomorrow.
Don’t lessen your due diligence when sourcing supplies via new sources away from China, Asia or other parts of the globe experiencing problems. Beware that counterfeit markets thrive in times of crisis, and quality and social responsibility risks should also be considered in addition to cost and immediate availability. Now is the time to increase efforts to protect your firm and supply chain; not lessen or weaken it with quick or cheaper sounding alternatives.
Don’t forget the potential to involve your firm accidently in forced and/or child labour, poor working conditions and other human rights abuses when prequalifying new and potential vendors.
Don’t immediately threaten legal action against suppliers in a bad situation and who try to enforce force majeure clauses. Work on a reasonable course of action instead. Cooler heads should prevail and honest transparency about the situation and capabilities should be shared with you – as partners and lenders – if you’re going to get through the storm.
Don’t participate in the hoarding, resale or profiteering from food, cleaning and medical supplies, protective equipment and other essential items which could be redirected and used in the production of medical supplies for frontline workers in your community. It’s just not right.
Don’t wait for authorities to enforce new sweeping regulations controlling the supply chain. Lend your expertise and see how you might participate in local supply chain coordination units to ensure the public’s safety and a strong and resilient supply chain of much needed goods and services.