By Susan Eckel
The COVID-19 pandemic has made one thing perfectly clear—change is coming. Disruptions in the MRO (maintenance, repair, and operating) supply chain. Reduced revenues. Higher cost of goods. All of those are part of the fallout from the pandemic, and all are impacting how companies manage the supply chain. Where we finish remains to be seen, but wherever that is it will look substantially different than where we are today.
Earlier in the pandemic, the Institute for Supply Management (ISM) reported that 44% of companies surveyed did not have a plan in place to address supply chain disruption issues. More recently, ISM research revealed that 95% of surveyed organizations have experienced some disruptions.
Clearly, companies, including manufacturers, need to look ahead. If you haven’t started to think about your supply chain in post-pandemic terms, now is the time. While supply interruptions will undoubtedly impact businesses for months, it’s still not too late to formulate a plan to ease that pain and position yourself for a quicker recovery while preparing for any future disruptions.
Synovos is an independent MRO supply chain management services company in the thick of this battle for many clients in the pharmaceutical, life sciences, University, and food industries. Those clients and others are all deemed essential for the products and services they deliver. As a result, the company’s supply chain services are essential in allowing clients to maintain production. While the industries vary, there is some commonality in how manufacturers should respond to this crisis. Here are the top recommendations:
- Be flexible. Being able to adjust quickly in these types of situations is extremely important, as conditions change rapidly. For example, government decisions—whether from the local, state, or federal level—dictating behavior and requirements can happen quickly, rendering any previous plans moot. You must be willing to adopt to these changing conditions.
- Sure-up Your Supply Chain. The pandemic is exposing weaknesses in the supply chain for companies of all sizes across all industries. And while we’re in the middle of this situation, it’s not too late to begin learning some of the lessons being taught. Strengthening your supply chain, now and for the future, is mandatory. Some questions to ask yourself and your team:
- Are you aligned with the right partners, those capable of supporting planned and unplanned requirements?
- Do your supplier relationships cover the range of categories required in emergency situations?
- Are there sourcing options for critical spares? Avoid being locked into a sole supplier situation. Identifying secondary sources is vital as the supply chain contracts.
Being able to answer these questions goes a long way in strengthening the supply chain.
- Implement a stronger digital platform. Develop a proactive supplier management program with a long-term focus. There are multiple options available for supply chain management technology. Use it. The technology offers better visibility into the spare parts and materials you’re using (and how fast), reducing transactional costs. Armed with that information, you’re able to initiate better demand planning and ensure critical inventory is owned and secured. The data also enables more efficient use of your maintenance team, allowing them to become more proactive rather than firefighters.
- Plan now. While positive signs are beginning to emerge regarding the COVID-19 pandemic, it is never too late to begin planning for the next unforeseen event. Using an integrated supplier is one option to consider. With deeper sourcing capabilities, an integrator is positioned to deliver better planning and sourcing in a crisis. For example, one large manufacturer in the Southeast United States worked with its integrator in creating a hurricane evacuation plan. That plan involved the relocation of critical materials, equipment, and personnel (and their families) within a few hours of making the evacuation call. Those plans have been implemented twice in the last two years. Each time, the company’s preparedness has enabled them to support multiple locations not impacted by the storm, while enabling a quick return to production after the storm passed.
While the pandemic crisis is different from hurricane evacuation, the lessons are the same. It’s about understanding your needs and communicating those needs across the company. When the crisis eases, it will be too easy to fall back into previous habits and processes. Avoid that trap by and position yourself for a faster rebound.
Eckel is Senior Vice President, Sales & Marketing for Synovos, an independent integrated supply chain management services company. She has extensive experience in strategic sourcing and procurement, and is adept at introducing effective solutions to meet the complex needs for companies, from Fortune 50 on down. Susan can be reached at (610) 293-5940.
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