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.