COVID-19 came seemingly out of nowhere, and within a few months of us hearing about it in China, governments all over the world had locked down.
Borders were closed, workplaces were shuttered, and travel was restricted to only the most necessary.
As a result, supply chains all over the world took a hit. Shortages in raw materials and manufactured goods appeared. Nobody is unaffected.
However, you still have a business to run. So what is there to do? How do you prepare your supply chain for a post-coronavirus world? How do you manage it right now while there’s a pandemic going on? We’re here to help.
How To Handle It Now
Focus on your people.
Your workers are the lifeblood of your organization. Making sure that they’re safe should be the number one priority.
Look for opportunities to use your workforce to keep the business afloat while the world deals with this crisis.
Right now, the US government is providing incentives to businesses to keep their workers employed. Learn more about the Paycheck Protection Program now!
Come up with and execute a business continuity plan.
Right now, your goal is to survive the pandemic. Many businesses will not survive, and those that do will be poised to take advantage of the demand that pops up after everything opens up again.
Keeping your business alive is the key, and to do that, you need to design and execute a business continuity plan.
Do so with your finance department, and take advantage of as many government resources as possible, as they’re continuing to print money to help keep the economy afloat.
Keep Communication Open
It’s absolutely paramount to maintain open lines of communication with your suppliers and distributors. It might feel like you’re bugging them, asking when things are going to reopen again, as they don’t have the answers. However, you need to make sure that you’re keeping in touch so that if they get news, you get news as well.
They’re going through the same thing you’re going through, and may be able to offer help. Keeping in touch with your suppliers and distributors will help make sure that the relationship continues to be strong, even when money might not be changing hands as often.
Preparing For a Future Shock
Understand Supply Chain Risks
Although many people think that we’re in the worst case scenario, that’s simply not true. A second wave of this virus could come, and there will be more pandemics and more supply shocks in the future.
The first thing you as a manager need to do is look at your entire supply chain and understand where the risks are: both individual and systemic.
Is all your product being manufactured in a single country, like China or the USA? That’s a risk. Do you rely on specific sea routes? That’s also a risk. These risks are obvious, but your supply chain could have risks that you weren’t even thinking about.
Understand Your Suppliers
Many companies don’t know where their raw materials come from, because they deal with manufacturers only. Mapping upstream suppliers as far back as possible will help you understand where the risks are.
Also, understand the risks your suppliers face as well. There’s a lot that suppliers won’t tell you, but a good relationship with a supplier will allow you to understand the risks they face as an organization.
Run the possible scenarios.
As we saw this spring, anything can happen. A virus could pop up out of nowhere and infect people in every country on Earth. However, there are other scenarios.
For example, the 2011 Tohoku earthquake in Japan hurt the supply chains of businesses all over the world. That’s a contingency that many people did not plan for. Those that did, knew how to handle it.
It might seem that these events come out of nowhere, but earthquakes and pandemics are nothing new. Neither are wars, economic sanctions, or economic crises. Understanding what could happen in the world, and what is more likely, could help you navigate future shocks.
● Taking action on a business continuity plan, keeping your attention on your people, and maintaining strong relationships with your suppliers and distributors is your key to survival.
● Understanding the risks, suppliers, and scenarios will help you deal with a future shock.