There is much discussion about how to keep operations running in a period of such uncertainty and restriction. In previous posts, it was pointed out how operations are trying to adapt, either through adoption of fixed teams, shift scheduling, new partnerships to carry out urban delivery and arrive at the customer's home, among others.
Companies seek to adapt to a scenario of erratic demand and supply risk. For some sectors, the criticality of this issue is much higher, such as food and health. One of the great risks of the pandemic is the lack of capacity of hospitals, of not having the resources to help all the demand.
This challenging environment allows companies to learn, be flexible and prepare to meet a different post-crisis scenario, both in terms of demand and supply. Otherwise, the opportunity to be resilient and more empowered, knowing that other moments of turbulence will occur.
Figure 1: Challenging environments such as the covid-19 pandemic bring learning opportunities. Source: Dmitry Ratushny on Unsplash
The concept of a resilient supply chain, that is, one capable of acting, learning, adapting and returning to a stable status in the face of adverse events, has been discussed in the supply chain risk management literature for years. I brought here some examples of situations similar to those we are experiencing today with the pandemic, and how several chains managed to overcome and became stronger because of it.
Starting with a perhaps closer example, it would be the scenario of the Spanish flu in the first decades of the XNUMXth century. In a scenario of millions of deaths and GDP recession, in the US, there was an issue of coal shortages for the industry, which was threatened with a production stop. From that moment on, the concept of safety stock and having some protection in the short and medium term began to be implemented in a more organized way. Wouldn't it start to make sense today to discuss investments in alternative forms of transport? Or think of new ways to relate to the end customer through shared deliveries or apps?
Another interesting case of a supply chain that went through a crisis, remodeled itself and, therefore, became more prepared for the next crisis, is that of Cisco during the H1N1 epidemic. After the shocks that occurred on September 11th and a few years later an earthquake in Taiwan, the company began to structure risk management teams and draw up action plans by mapping the entire chain, identifying weaknesses and communicating with partners around the world. . The goal was to be able to respond quickly to any supply chain disruption event. This allowed that, given the first warning about the virus, several previously designed processes and plans were put into action, reducing the impact of the crisis.
Taking into account the current scenario of change, both in the way we consume and produce, perhaps it is time to analyze risk management in a more structured and professional way, use technologies already available for simulations, process design in case of catastrophe, among others. . The supply chain must be able not only to react to a crisis, but to be flexible and ready for when it arrives, taking advantage of learning opportunities and building new skills for a future that will have different competition rules.
What lessons will your company take from this crisis?
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Jessica Silva
5 years of experience in training, consulting and market research projects in Supply Chain for companies from different sectors such as Coca-Cola, LASA, Silimed, O Boticário, Monsanto, among others. Worked on inventory planning projects, logistical master plan, transportation and indicator management. He also participated in the development of the ILOS online courses on Logistics and Supply Chain, Procurement Processes and Industrial Management, in addition to research in the pharmaceutical sector.
