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Supply Chains: Plan for Now and the Future During Coronavirus

Though we are all in-the-midst of COVID-19, businesses need to act on how to reduce the impact to their supply chain. You also have to ensure employee safety, but also operational growth. What should your business do today?
  • Create transparency on multiple-tiered supply chains: determine the origin of the supply and look to alternate sources if they are in severely impacted areas. Know who your suppliers’ suppliers are, and know if they are in a COVID-19 impacted region.
  • Optimize production and distribution capacity: determine the impact on operations and resource (workforce), along with employee safety and communication with your employees.
  • Determine realistic demand from the customer: working with sales and operations, planning demand and required supply; market databases (insights/external) to get an estimate for the customer’s customer. What is the capacity to satisfy a sudden increase or decrease in demand? Will there be a change in demand?
  • Estimate the available inventory: gauge your inventory along your value chain which includes spare parts and re-manufactured stock. Keep production running by using after-sales stock as a bridge. Determine how much inventory of spare parts and components are available with suppliers and distributors.
  • Analyze and capture logistics capacity: determine available logistics capacity; quicken customs clearance; adjust transportation given current exposure. Long-term contracts will help secure capacity in the supply chain and benefit the manufacturer as well as the supplier. Securing long-term contracts will help control costs and enable priority access to logistics.
  • Maintain cash and net working capital: discern when supply issues will start to stress financial or liquidity issues by running supply-chain stress tests vs suppliers balance sheets.
What to do once you identify the risks? Once you identify the risks, you must design a strong supply chain for the future. Processes created during this period of crisis should be entered into official documentation. This record should also be a permanent guideline for future vulnerable situations. By doing this, your supply chain will have greater resilience. Digitizing your supply chain management system with SAP Business One will increase the speed, accuracy, and flexibility of supply-risk management. This will also enhance capabilities in predicting risks, achieving higher visibility and planning along the supply chain and also fixing any issues that emerge from the complexity of a growing product. After the crisis… When the crisis is over, your business must look at your vulnerabilities and shocks that exposed your supply chain as much as COVID-19. By doing this, you will expose optimal chances to review the integrity of critical opportunities that reveal instability when individual items may appear strong. What did we learn? Supply Chain Professionals will see they need deeper visibility and teamwork to overcome any disruptions. By acting today and the months ahead, your company will come out of this crisis better equipped for the next one. Contact us today for a free evaluation!

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