In the current situation, when the situation with the coronavirus infection is changing so quickly: the growth of diseases is increasing and then falling, new strains appear almost every month; it is very difficult to control the supply chain and be ready to cope with all possible consequences.
Certainly, every company that sells goods needs to have a clear emergency plan and escape routes. However, this disaster is not a short moment, and no one knows when it will all end.
Still, you can think over some actions in advance, analyze the results of 2020 and half of 2021 and understand how to act, especially if another powerful collapse comes along.
Actions that should be taken before a crisis occurs
1. Think about your staff first
The people who work in the complex chain of work of the company are extremely important. Without your employees, the whole process will stop and further measures will no longer matter.
In the case of coronavirus, employees must be provided with all the necessary protective equipment. The most important thing is not to do it for the sake of appearance. After all, one will fall ill, further the scale of the disease will progress. Of course, no one is insured, because people return home to their families, live their lives, and the next morning they come to work. However, shortening the distance, antiseptics at every point of the workspace, masks – all this must be in the workplace.
2. Create a scenario in case you cannot receive supplies
It’s important to work through every moment, in case your suppliers are at the epicenter of what is happening. All of China at the beginning of the pandemic was practically cut off from the whole world. China, in turn, is the largest supplier for most companies. It is impossible to stock up on all the goods so that there are no interruptions in supply, but you need to be prepared for the lack of basic materials and goods.
3. Set up a crisis management center
Organize a structure that will deal with the elaboration of actions in the event of an emergency – a crisis management center. All companies have such a center, but in fact they operate either at the level of the entire organization, or only in individual divisions. COVID-19 made it clear that this was not enough. Each subdivision must have its own control center and be linked to the main center. Each department should have a clear and structured plan of protocols, distribution of roles between functional departments, and decision making.
Analyze your supply chain
A year and a half after the beginning of the spread of coronavirus infection, you can draw conclusions about what is wrong with your supply chain in order not to face similar problems in the future. When the emergency has already occurred, you will not soon be able to understand how much damage was caused to your company.
Thoroughly analyze and research each of your suppliers. Draw up a supply scheme for your company.
Don’t place all your bets on one bulk supplier. When a crisis occurs, it is not certain that your main supplier will make you a priority in the supply chain.
Apple and many other device makers were hit instantly when a virus infection swept across China. Perhaps huge global companies will be able to recover from losses, but everyone else will have a much harder time.
Maximize the likelihood of continuity of supply. The plan should consider critical regions and contingency options for shipping, communications and cash distribution. It is important to work out a plan with your suppliers.
One backup plan is good, two is better
A year ago, no one thought that everything could collapse. Natural disasters always happen, but business can recover quickly. But what to do when the borders are closed, when almost all the routes of commodity supply are closed?
Availability of spare sources. This scheme will not allow critical supply disruptions to take place. Having at least two sources increases your chance of success if one of the sources is unavailable. Having worked out such a scheme, you will significantly reduce the risks for your company, and you will also be able to calculate additional costs before the incident.
Find local sources of resources if possible. Definitely, when your suppliers are located in different parts of the world, your business can save a lot of money through mass production. However, if your main supplier is unavailable, then you will have no interruptions in supply and lower shipping costs.
These methods describe only in general terms the actions that must be taken even before the onset of a crisis situation. Professionals in their field will provide immediate assistance in finding a supply chain optimization solution.