The situation of the COVID-19 pandemic has done much to emphasize the need for making supply chains more resilient in the face of disruption.
Of course, the need for such resilience has always existed for a long time. It could be said that this situation merely accelerated it to the point of grave urgency.
The real problem has always been how to do it.
This is where step-change comes in. It is a process that you would think should be SOP for many in the business of managing supply chains. However, would we really be in the current situation if that was the case?
That’s why in this post, we’ll give you a thorough outline of what the step-change process should be like and if managers have really implemented it in the face of the COVID-19 crisis. We’ll also be looking at how different governments around the world have served as good examples of using this process in response to the pandemic!
Let us start with three very basic questions.
1. Do we have a Supply Chain Strategy?
- This requires a yes or no answer. If not, why not?
- Take note, there is a difference between a plan and a strategy which links (and is totally consistent with) the business strategy. No debate necessary here. If we don’t have a stated supply chain strategy that everyone in the supply chain (and indeed in the business) is aware of, then the supply chain will be messed around by the functional silos all trying to fulfill objectives at the expense of the whole. This only sends us back to the supply chain’s proverbial dark ages, where the loudest functional or geographic voice wins at the expense of the entire organisational objective.
- Organisations typically do not have documented supply chain strategies because these require a higher level of thought which is typically not found even within supply chain groups! And even then, they are not deemed necessary by anyone elsewhere in the organisation because of the fundamental lack of knowledge about the supply chain and an irrational fear of losing (positional) power.
How did Covid-19 inspire this thinking?
Governments came up with a clear national strategy to beat the coronavirus health crisis: flattening the curve. The higher level of thought is that this is what we needed to do to ensure that our individual state health systems are not overwhelmed by people already infected.
The lesson you can learn from this is that it makes good sense to have a clear supply chain strategy which states what the supply chain objective will be at the overall corporate level and ensures that there is an equally corporate level of buy-in.
2. Do we understand the Supply Chain Plan as it links to the Supply Chain Strategy?
- This also requires a yes or no answer.
- What does the plan look like for every section of the supply chain and indeed the entire end-to-end supply chain?
- The plan may be a three-year plan or 12-month plan, but it may also be a monthly plan which turns into a weekly, and then daily plan.
- Specifically, how does the plan reconcile with the relevant functional plans. And if it doesn’t reconcile, guess what? That’s an area that needs to be investigated and resolved before the plan is approved and implemented.
- By the way, the plan should be articulated and communicated, not just reduced to a mere spreadsheet of data!
How has Covid-19 inspired this thinking?
There was consistent planning and then implementation to beat the crisis. From national governments, the strategy went down to plans for the individual states, who had been all working on their own consistent way of ensuring the goal (flattening the curve), each with somewhat different plans but all are consistent with the overall strategy. (The states can be likened to various geographies and functions in a corporation. And whilst each of their individual plans might differ in various ways, their entire approach must still support the delivery of the organization’s overall supply chain strategy.)
A healthcare crisis requires care for others, predominantly those that are more vulnerable, such as our elderly. It requires everyone working together, towards the greater good, the national interest, than their own (lesser) objectives. Think about this in the context of cross-functional processes and how everyone needs to work together to deliver a supply chain goal (as opposed to just fulfilling their own functional objectives which individually can be completely and fully delivered without any product ever getting to it’s rightful customer in the perfect way).
3. Is the Day-to-Day Operation of the entire End-to-End Supply Chain consistent with the Plan?
- Again, this too shall require a yes or no answer.
- Just think for a moment how we would achieve this. The technology to do this is most certainly available now. If we don’t already do this (like so many others), then we’re just waiting for something to happen before working out the impact of that event. And when we take action, it’s always rough, rudimentary and overly dependent on gut instinct to work out how to recover. Why do we behave like this?
How has Covid-19 inspired this thinking?
Firstly, we have scenario modelling. Health organisations all around the world have modelled the trajectory of the novel coronavirus disease. Surely we can do it for our supply chains as well! Scenario modelling can be used to work out what our strategy should be and if it’s doable. It can be used at the planning level to determine whether our individual implementation of the various sub strategies (like social isolation) will work or be sufficient by themselves. And then, this needs to be used monthly, weekly or daily to ensure we don’t digress from our stated objective. Furthermore, even if we ever do digress, it only necessitates an equally real-time plan to get us back on track.
Secondly, we use data every day. We’ve seen news conferences are beginning at the national and state level each day with key metrics. Likewise, there must be a resurgence of fact-based decision making in business, both in general and in supply chain terms. How certain are you when it comes to using all the data that you have available in your supply chain?
Before you simply answer yes, let’s start with an example: Toilet paper. Someone collects details on toilet paper purchases nationally and internationally every day. That data goes somewhere. Now, if anyone was actually analysing that data, would the fiasco of panic buying have ever even started? It would never have been allowed to occur!
It’s certainly one classic example of data being collected at POS, every day, every roll, every purchase, but not a single person is doing anything with that data. Here’s the real lesson though: Don’t assume that similar neglect is not happening to products in your supply chain!
Thirdly, we have the availability of apps and new technology to assist our flatten-the-curve movement. Whilst this has been slower to come to the forefront of the Covid-19 crisis (such as the slow start on WhatsApp), sooner or later we knew that new technology would join the fight. Where is the new technology in your supply chain and what’s available right now, that you didn’t even know about before the pandemic? You might be surprised.
Now, why would the above simple and basic issues be the source of such disagreement and debate? Do you think that if we had the above in place, it might drive other important behaviours in our supply chains like proactivity (which we desperately need) as opposed to reactivity(which we have in bucket loads)? Do you think we could get a resurgence in fact-based decision making due to a greater dependence on data, and greater focus on supply chain risk and mitigation before a crisis or disruption occurs?
After all, if we had these resolved, the path to resolution for damaged supply chains becomes extremely clear and somewhat obvious.
Now, I am not suggesting that everything about the various governments’ approach to the pandemic has been perfect. All I am trying to demonstrate is what needs to happen more in our supply chains if we are to rebuild and co-create. We need resilient and fit-for-purpose supply chains that support extraordinary business performance. It’s only reasonable to refer to what we are seeing every day as a means to help demonstrate that assertion.