3 Lessons Learned From COVID-19 Operational Pivots
Here's what these pivots mean for tomorrow’s supply chain.
The early days of the Coronavirus disease (COVID-19) pandemic impacted supply chains across industries. But, no two experiences were the same. Some supply chains couldn’t keep their product in stock because of incredible demand – the toilet paper aisle at your local grocer was likely a good example. Others, such as the oil supply chain, had so much product that prices temporarily turned negative. Other supply chains pivoted their operations entirely. Beer companies turned their brewing machines into hand sanitizer-making equipment for frontline workers. Car manufacturers began using assembly lines to create personal protective equipment (PPE) and ventilators. While it’s unlikely your supply chain will ever have to take such drastic measures, we can learn important lessons by how quickly these businesses were able to build partnerships and transition their production lines to new products. In an increasingly virtual economy, the businesses that can leverage data to pivot at a moment’s notice are the ones that will thrive. Let’s look closer at what these pivots mean for tomorrow’s supply chain: Master your inventory In order to manufacture respirators, car manufacturers had to partner with other companies to leverage each business’ existing inventory. With vehicles becoming more complex and retailers carrying more SKUs than ever, understanding product attributes is critical. Size, shape, color and raw materials used in production are among the many important data points for each SKU. You also need to know how many of which SKU you have available at the moment, as well as ideally where, and what inventory will look like in the coming days and weeks, based on production. Having quick access to clean, consistent product and location data will help you understand which items you might be running short on, what raw materials will be required to meet demand, and where best to source from. Stay in lock step with suppliers Partner with companies who can provide parts needed for ventilators, for example, as the materials needed from your suppliers to shift production is a time-consuming task. For instance, in the automotive industry, manufacturers needed materials such as elastic for face masks. If your business doesn’t have a process for quickly identifying and onboarding a new supplier, now’s the time to develop one. You need to have an agreement for sharing data to ensure your suppliers know exactly what materials you need, where, and when. And, as consumers become more socially conscious, being able to trace where your suppliers are collecting raw materials from helps you act more transparently as you place products on the shelves. Consider impacts on the assembly line Producing hand sanitizer requires different regulatory requirements than producing alcohol for consumption. Keeping factories clean when producing PPE is critical. Training employees to bottle or package products they’ve never worked with requires significant training, slowing down production. No matter how quickly your supplier can replenish your materials, any snag on the assembly line can bring your supply chain pivot to a halt. Ensuring you have the ability to see and communicate around product attributes requires having shared access to that data. Make sure that you’re keeping any information about your production processes up-to-date. That means monitoring any annual inspection timelines and ensuring your equipment is up to snuff with the latest regulations. It also means keeping track of potential sales spikes, such as peak season, that will require temporary labor, and making sure everyone is trained effectively before the rush arrives. Having clean, consistent data that can be properly leveraged for different business processes is critical to not only meet demand during these spikes, but to deliver value for your customers. Data is key to quick adjustments Companies didn’t have the luxury of seeing their pivots coming, but you do. As a supply chain professional, you need to be thinking now about potential production disruptions, and how your business will respond to these sudden changes. Visibility into your existing product and customer data will help detect and meet shifts in demand. If you haven’t already, now’s the time to consider solutions such as product and customer master data management (MDM), which forms the hub for data-driven organizations, giving an accurate and consistent view of all pertinent information – product attribute information, sales data and customer preferences – by allowing visibility into all your master data from one system. It breaks down silos within your business to keep all departments communicating, from production to marketing, and ensures everyone is working with real-time information, making a quick pivot easier. In today’s “New Normal,” a lot about the supply chain has changed. But, the industry is resilient and used to thinking ahead. With the right data and strong relationships with both suppliers and customers, you’ll be ready to take on whatever pivot comes your way.
Source: Doug Kimball | Supply & Demad Chain Executive