What your business needs to do for the immediate term and for the future to keep things moving
We may never again see a supply chain crisis like the one that COVID brought. The world essentially shut down entirely then tried to crank back up, doing so in fits and starts. The number of different factors that converged to create this mess was astounding. But it would be a mistake to convince ourselves that everything was just fine beforehand, and that an unlikely series of events that could never happen again is the culprit. There were broken links before COVID, and solving the supply chain crisis will take creative thinking for the short term and the long term.
The first thing to remember is how many things are outside your control. It’s the world, after all, and things happen. What you can do is optimize those factors that are in your control. If you haven’t already, digitalizing your supply chain is essential. That’s no longer a nice-to-have, it’s an absolute must. Then a dive deep into data analytics will be needed to recognize patterns and predict shifting demand. With the entire world resetting, the old models don’t mean a whole lot. There are entirely new patterns emerging. Some of them will last only a few weeks or months, and some will set the new baseline going forward. Recognizing both will be important, doing the best you can in this interim period while laying the groundwork for a future-proof system.
Solving the supply chain crisis also means treating your customers as people who are experiencing the same disruption and going beyond the data. Do some old-fashioned analytics and talk to your customers, figure out what their immediate needs and priorities are. There is no business-as-usual right now, and they’re scrambling just as much as you are. Not only will focusing on their short-term needs help keep them going, they are sure to remember how you went the extra mile for them when they were up against the wall. Solving the supply chain crisis is nothing if not a collaborative effort.
You might need to prioritize metrics other than price for a while. Getting the lowest price doesn’t do you any good if the items you need don’t actually arrive on time. In the short term, you have to get the materials and components you can while you can get them. That might mean seeking out other sources that can provide shorter lead times. You are still figuring out which vendors and sources will work best for the future in your revamped supply chain. That’s not to say loyalty means nothing, but it’s a two-way street.
For the long haul, sustainability needs to be a priority anyway. If it wasn’t for you before, now is the time to overhaul your operations to add in more sustainable practices. That might mean different sources for raw materials, even using different raw materials altogether. It might mean rethinking the suppliers you use for transportation, both long distance and last mile. It means a conversation with investors about ESG and getting everyone on the same page that sustainability is a solid long-term investment and that there really is no viable alternative. COVID provided the kick many organizations needed to take meaningful action on sustainability.
Invest in the Future
There are a lot of tech upgrades you can install, including automation, data analytics, and digital twins. There are a lot of talented people looking for the right opportunity. There are suppliers out there who might be the right fit for your future. Now is the time to invest for the future. It might involve a lot of upfront costs but solving the supply chain crisis was never going to be easy. You’ve made it this far, which means you’re doing a lot better than a lot of companies. But this will not be the last crisis. It might very well be all a test run for dealing with the effects of climate change. New conditions might mean places where you source raw materials no longer have them aplenty. New shipping lanes might need to be found. As we’ve learned the last couple of years, you never know what drastic changes are coming down the pike. With the right investments now, you’ll be ready to react. That will go a long way toward solving the next supply chain crisis.