The impact of COVID-19 on supply chains: Part 2
This second installment of a three-part series on supply chain resiliency and COVID-19 was written by Julia Thompson and published on LinkedIn. Read it here.
- Access to detailed, real-time data is key for resilience
- Enhanced communication and collaboration emerges as a response to COVID-19
This article is the second of a three-part series that aims to explore the real-world, on-the-ground impacts of COVID-19 on transportation, logistics and supply chain operations.
In line with the CPCS problem-solving approach, each article is driven by a key question. For this article, that question is:
How are companies responding to COVID-19 disruptions?
Forward-looking companies have proved resilient by reacting and adapting – quickly and smartly. Detailed, real-time data and enhanced communication are critical to sustain an agile and flexible supply chain that can withstand disruptions.
Preparation enhances resiliency
Well-prepared companies had already mapped their supply chains. This enabled the development of mechanisms to address and mitigate disruptions during the COVID-19 crisis.
The figure below details specific steps for supply chains to mitigate the effects of disruptions, as adapted from “Preparing and Responding for Supply Chain Disruptions” presented by the North Jersey Transportation Planning Authority (2020).
Resilient companies maintain supply chain visibility. They continuously prepare by understanding how their supply chain links are operating during COVID-19. For instance, knowing whether a supplier is implementing preventative health measures or not provides insight into potential disruptions and informs mitigation practices.
Detailed, real-time data enables response to disruptions
Detailed, real-time data is particularly critical for responding to rapidly changing patterns in today’s highly unpredictable environment. Such data enables precise-decision making – by both humans and software – to respond and adjust to changes happening now. The need for real-time information is doubly pressing as today’s data loses its usefulness more quickly than ever. Data must be region-specific as well, given the geographic variation of COVID-19’s impact.
Equally important to the effective use of data is a culture of data; this includes data literacy, the ability to understand and apply data, and the use of data-driven decision making practices.
Communication and collaboration are more important than ever
Transportation, logistics, and supply chain stakeholders have underscored the importance of communication and collaboration, as partners along the supply chain rely on one another to maintain resilient operations.
- Communication fosters transparency and trust between transportation, logistics, and supply chain stakeholders. In turn, transparency and trust between supply chain partners increases speed and agility along the supply chain.
- Strong communication means that stakeholders can better monitor the supply chain’s status and understand partner and customer needs. This enables quick response to any changes in an already rapidly evolving environment and market.
COVID-19 has also altered how, when, and with whom communication and collaboration occurs, as detailed in the figure below.
Transportation, logistics, and supply chain experts have shared observations of increased “crisis-fueled collaboration,” with recognition of a shared purpose as stakeholders across the supply chain are working to navigate an unprecedented landscape. Stakeholders have newly aligned interests: employee safety first – followed by a need to enhance supply chain resiliency. As a result, stakeholders have since increasingly worked together with customers and competitors, across industries, and in both public and private sectors.
Areas of collaboration include the following:
- Exchanging best practices and protocols for employee health/safety and sharing access to COVID-preventative supplies (e.g., hand sanitizer, PPE).
- Minimizing physical contact. This may entail making significant changes to services and operations (e.g., providing extra service times, adjusting schedules) to minimize contact.
- Collaborating to manage demand. Examples include carriers working with customers to handle demand and food suppliers uniting to redistribute resources from a restaurant supplier to a grocery supplier.