The repercussions of the coronavirus spread are felt across the commercial world. Due to the extremely connected global economy, the effect is going to be widespread and will last for a long period of time. In the wake of the pandemic, supply chains will need to undergo a radical transformation. Most countries are slowly coming out of the lockdowns that were imposed to contain the virus spread. With governments unlocking economies, every organization needs to assess their exposure and plan how they can support their key stakeholders, employees and customers.
Resilient relationships with suppliers
Disruptions can be kept at a minimum by developing collaborative and resilient relationships with critical suppliers. Spot opportunities in the face of challenges and then reset the current working models. Companies who are able to adapt their supply chains according to their Covid-19 exposure will emerge resilient and will be able to withstand other contingencies they might have to face.
The key areas that need attention are:
Safety of the people: the HR department should ensure the physical and emotional health of the employees with the apt advice for those placed in impacted areas. Practice corporate social responsibility (CSR) regarding employee stability, environment, wider society and economy, and pursuing ways to support response efforts.
Strategic team formations: Form a special team to maintain constant flow of the right information between key stakeholders; this will help in sustaining stakeholder confidence and customers about the impact. Establish a team to focus on supply-chain assessment and risk management to assess global and regional supply-chain flows, utilising alternative modes of transportation and conducting trade-offs according to the needs, cost, service and risk scenario analysis.
Review capital and business processes: It’s time to review your review your cash flow, working capital management and inventory forecasts along with the supply and demand predictions. The days ahead are bound to be financially strained due to further stock market declines and restricted access to funding. Strategic business planning needs to be synchronized across all business processes. Businesses with data rich environments can harness capabilities in procurement, operations and research and development (R&D), using advanced simulations to identify optimum performance trade-offs.
Micro supply chains: The chief focus of the supply chains of today is cost reduction and spurred the creation of large, integrated, global networks which have grown in proportion with outsourced manufacturing to emerging economies, backed by long-term contracts. Covid-19 has raised many a question, whether this is the way ahead. Shifting to micro supply chains can prove to be efficient and effective in the long run.
Improved supplier relationships: Now is the time to build collaborations with crucial suppliers based on trust and transparency.