Covid-19 has validated the criticality and strategic importance of supply chain management – that is a given.
In this thought leadership contribution, Tom Craig, President LTD Management, Pennsylvania, USA, a leading authority and professional consultant on logistics and supply chain management and regular contributor to Global Supply Chain examines the best case scenario for the restoration of normalcy in a sector turned on its head and ravaged by the pandemic.
Firstly and clearly, the global pandemic is not over. Its impact is still being felt in economies, industries and in markets around the world. How businesses come out of this will differ—from restart to rebuild. It has shown to be the operations backbone of retailers, e-tailers, and manufacturers. Supply chains and their transportation and logistics components are essential services after all. It has been nearly impossible to come through the coronavirus without a changed supply chain management… and it raises a question. Has Covid-19 shown that supply chains were in operating ruts—precoronavirus? Or, in another way, has it taken a global pandemic to make needed changes in SCM? So, what now? It is time to build on what was done—the good and the flaws that were exposed. This is an action plan that supply chain management people can use to put in place for the new supply chain management.
No cookie cutter approach. What I am presenting may not apply to supply chains across industries, market sectors, and the world. Each business has been affected differently by Covid from none or little to extensive. However, there are changes and a new supply chain. While every point here may not be relevant to every business, it does present
thoughts to consider for the new supply chain management and new economic and business reality that is being formed. Some of the changes that are happening are overdue, call it pre-Covid. An example is of firms that are doing SKU (Stock Keeping Unit) rationalization which is a subset item for inventory and warehousing. Others may
have been held back—but that was then and this is now.
Several of the items contain talking points that appear in more than one action item. That reflects the nature of supply chain management. STRATEGY: This is your starting point. This involves a cohesive plan for where
you are going and how you will get there— your new supply chain management. This is what will be done and how it will be implemented and executed. This involves the what, the how, the why, and the steps.
It should include collaboration and buy-in from other areas in the company. The strategy should be about more than fixing problems that the coronavirus exposed. This is your clean sheet of paper. It should reflect how your end-to-end supply chain should be designed and managed for viability. Here are two approaches for your assessment:
Upstream / inbound and downstream / outbound / fulfillment-these are the two sections of the end-to-end supply chains.
These are the parts that had to deal with Covid. Think about that and all you have been dealing with. And / or Inside the four walls and outside the four walls (This is a variation of warehousing and transportation.) Much of your
supply chain is outside the four walls of distribution centres, factories and stores.
Four-wall myopia limits seeing the end-to-end supply chain and its complexity. In turn, this view can impact how well your ERP system functions. This leaves a hole in lean efforts. Do not miss the big picture where so much goes on. These are different from how supply chains have been traditionally structured, and that presents opportunities for new ideas. This includes the usual operation as to stop-go / node-link. This can help with streamlining how products move and sit.
More of this article can be found on www.globalsupplychainme.com