Supply chains are in disarray – here are three focus areas
The aggressive spread of the COVID-19 pandemic has caused various business segments and industry sectors to scramble.
However, looking at the current scene of barren supermarket shelves, grinding manufacturing activities, closed factories, and delays to shipping services, the complex supply chain networks that we take for granted have been thrown into disarray.
With situations uncertain across the globe, there is no telling when the supply chain can recover and pick up its pace. For now, supply chain leaders are still grappling with the severity of the situation.
In a highly demanding and exhaustive situation like this, it can be easy for leaders to lose focus or miscalculate their next steps. In order to gain better control over the crisis and improve impact management, Gartner has advised that leaders direct their focus and efforts towards three main areas specifically – the workforce, products, and costs.
# 1 | Protecting the workforce
A key area of focus is the workforce. Employees are much more likely to be exposed to the virus during work that requires travel. Leaders must prioritize the safety and health of their teams by making sure they are abiding to quarantine enforcement laws and movement restriction orders.
Protecting them from now on will be key in ensuring a fast recovery is achieved once the pandemic threats are neutralized. Additionally, it’s important to communicate instructions clearly when it comes to travel security essentials and to provide the necessary support for those who are ill.
# 2 | Prioritizing the products
Loss of market shares will be inevitable when suppliers can’t meet consumers’ demands quickly enough in the circumstances. Trade-off decisions will have to be made quickly and tactfully. It’s best that leaders focus on what is worth trading off.
Gartner’s Senior Director Analyst, Sarah Watt, said: “Supply chain organizations need to frequently reassess their supply and demand plans based on the evolution of the virus and consumer sentiment.
“Supply chains may also experience sharp increases in demand for products or unexpected consequences from the event, such as panic buying for essential items.”
# 3 | Managing the costs
The disruption has also affected costs in the supply chain. As higher risks are involved in ensuring the continuity of workloads and processes between chain partners, costs will most likely increase.
In other cases, the investments made may be burned off because of unforeseen circumstances that halted the entire chain altogether. Moving forward, leaders must revisit contracts they make with partners and make sure to mutually establish a common ground when it comes to protecting all parties’ interests in unfavorable situations.
After all, ensuring financial security is key if leaders want to be able to have enough to continue business even at a reduced speed.
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