Global crises like the COVID-19 pandemic can severely affect almost every aspect of a business’s operations. In particular, the pandemic has highlighted the essential yet delicate role that supply chains play in modern business. Most people have experienced the effects of disrupted supply chains during the pandemic, from empty grocery store shelves to the acute shortage of personal protective equipment.
Recovering from supply chain disruptions is necessary for any business to survive. Effective recovery takes quick, decisive problem-solving, adaptation and creativity. These recovery efforts become the responsibility of supply chain management professionals who understand all departmental functions involved in the supply chain to coordinate broad recovery efforts.
The University of West Florida’s Master of Business Administration (MBA) with an emphasis in Supply Chain Logistics Management online program prepares students with these cross-functional competencies. Coursework covers the intricacies of global supply chains and other key aspects of business management. These studies can give professionals the breadth of knowledge and leadership skills necessary to effectively recover from resource management challenges.
How Do Disruptions Like the Pandemic Impact the Supply Chain?
Take the pandemic-induced toilet paper shortage as an example. When widespread stay-at-home orders went into effect, people began hoarding toilet paper. To some degree, this is a natural reaction to extreme uncertainty: stock up on whatever you may need to weather the disruptive circumstances.
Of course, the supply chain couldn’t handle the overwhelming demand. Grocery stores couldn’t keep enough inventory in stock. Distribution channels couldn’t get toilet paper to brick-and-mortar retailers quickly enough. Even the largest online retailers were running out, and, as shoppers took to online purchasing, shipping services became overwhelmed. Delivery times stretched to weeks, or even months.
The pandemic also directly affected people in supply chain industries. Safety protocols, health concerns, and virus outbreaks slowed or halted productivity and distribution in a number of product sectors – not just toilet paper. This resulted in many overlapping, interdependent supply chains becoming further bogged down, or even breaking.
Because the demand for some products affects the processing of others, one major disruption renders components of the supply chain (and businesses) underutilized and unproductive, furthering the degradation of interconnected supply chains.
How Can Supply Chain Professionals Manage Recovery?
The toilet paper shortage is one example but reveals the many intersecting factors involved in supply chain disruptions (i.e., changes in consumer demand, delivery channels, time frames and production). To navigate recovery, supply chain leaders must draw insight from these intersections to inform strategic decision-making and mobilize crisis mitigation.
Expanding the supply base and using multiple suppliers to diversify sourcing and create resiliency in the supply chain is one way to avoid a product supply crisis. Diversifying delivery (transportation) modes can also add resiliency to distribution. These efforts, quite the opposite of keeping “all your eggs in one basket,” can help mitigate supply chain disruption.
Supply chain leaders must also work with other departments closely to gauge and respond to demand, especially from the target consumer amidst disruption (i.e., shortage-buying behavior). This means involving customer relations, marketing, product development and top-level management to pivot production and supply according to market demand.
Supply chain management can also leverage collaborative expertise and analytics to stockpile inventory or redirect assets strategically, meeting shifting or expanding demand. Further coordination with human resources and other departments regarding employee safety and transitions in work models help supply chain managers accurately project production capacity through a disruption.
What About Preparing for Future Disruption?
All of the above efforts can be interventions for an ongoing disruption and tools to build supply chain resiliency against future disruptions.
Some interventions may mean higher costs, like diversifying the supply chain. But, by thinking creatively, supply chain managers may secure backup suppliers willing to reserve an agreed-upon amount of production in the case of future disruption. This enables a rapid diversification of a supply chain during a potential disruption while avoiding investment in multiple suppliers in an ongoing capacity.
Forward-thinking supply chain leaders also closely analyze their supply chain, strengthening it where necessary. They may perform stress tests in a controlled disruption simulation. This helps identify weaknesses in the supply chain, which businesses can bolster or restructure to improve future disruption response.
If executed well, recovery efforts can become a roadmap for devising more resilient supply chain management and crisis mitigation strategies. These, in turn, can help leaders maintain supply chain continuity during future disruptions.
Learn more about UWF’s MBA with an emphasis in Supply Chain Logistics Management online program.
Sources:
McKinsey & Company: Supply-Chain Recovery in Coronavirus Times — Plan for Now and the Future
