08 Jul How to Prepare Supply Chains for Future Disruptions
Supply Chain refers to an interconnected business network, ranging from the storage of raw material, to the final product at the point of consumption. In other words, it is the connection between companies and suppliers, focusing on producing and distributing a product in the best possible way. Here’s what to do to prepare a supply chain for future outages.
After COVID-19 took on pandemic proportions, there were several consequences for the economic sector and everything within it. Including Supply Chain, which plays an important role in the distribution of articles such as PPE to health professionals and others on the front lines of combat, or respirators to patients infected by the virus.
With the quarantine, lockdown and stoppages that were made to reduce the rate of contagion, countries had to organize and adapt very quickly, to maintain their supply despite the obstacles. For this reason, every company must have an emergency management center, to be prepared when a disaster delays production, distribution and acquisition.
How to Establish an Emergency Management Center
When you deal with global markets, you need to be prepared for the unexpected and the unimaginable. To lessen the effects of possible disasters and crises, the best option is to have an emergency management center. Here are some highlights to put together an emergency center:
- Centralize information: In a time of crisis, such as the COVID-19, information can be scarce. You need to remain calm and look for information from reliable and solid sources, so that you pass credibility when talking about the subject.
- Have a single voice to speak for the company: It is important to have a person responsible only for communication. That person will have to talk to customers, suppliers, renegotiate values, postpone payment, etc.. Transparency is key in a time of crisis, which is why communication is so important.
- Leave the decisions to those who know the subject: One thing that can hinder the entire progress of the business during the interruption, is to let people without proper knowledge make decisions about certain matters. Let the person in charge of each sector decide what is best.
- Supply chain mapping: Staying upright after a supply chain disruption can ensure that you will still have an active flow of parts and materials. Therefore, it is essential that you have mapped your entire process. This mapping shows how the factory works, what products each department produces, where, etc.
- Recovery planning: It is necessary to think beyond the moment of interruption. In other words, it will be necessary to retain employees even if you have to cut down to part-time or home office, maintain the payment of salaries and give the necessary attention to each one. This will make a big difference in the post-crisis moment.
- Molding or replacing demand: If a product in high demand is in short supply, and there is a larger stock of a similar product, you can increase the price of the one that is missing and decrease the price of what is left. So, you do not fail to serve customers and shape their needs according to what you have to offer.
Finally, the most important thing at a time like this to maintain calm and good communication, both within the company and with customers and suppliers. With effort and good will, everything will be fine.