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Strengthen Your Supply Chain

- by Matt Stevenson

The biggest takeaway, for me, from the first 3+ months of this COVID-19 global pandemic is that supply chains are truly fragile.  Early on in this process, there were many hiccups for companies due to the abrupt lockdowns and restrictions that were quickly implemented.

Many companies had to scramble to continue to do business, adapting to the remote workforce, and maintaining product supply.  Many were forced to find and approve suppliers that were not immediately impacted, mainly domestic for products and supplies that were previously sourced abroad.  There were cost differences, interruptions to procurement, and in some cases loss of business because they could not meet commitments. Then the disruptions came to the US-based companies, businesses were shut down temporarily, and further issues with the supply chain for those that were able to carry one, and the implementation of safety measures aimed to keep their employees safe.  Now that there is a semblance of stability, though different than 2019, to many aspects of the supply chain again, it is important to reassess our strategies and mitigate risk within the supply chain to avoid future disruptions in our new “normal” way of doing business.

This pandemic will ultimately require many businesses to reassess their overall business philosophies and workforce strategy.  Adapt to more remote workers, social distancing built into the workplaces, different business emphasis, and likely a return of critical portions of the supply chain back home to the US for manufacturing.

Over the past several decades, many companies around the globe became highly reliant on production and materials from overseas countries that could provide at much lower costs than domestically. Prior to the COVID outbreak, many of these lower-cost options began to experience turmoil and instability from a number of fronts, mostly created by trade policies and governmental politics.  Those actions got some companies thinking about their strategy for overseas manufacturing–was it a good long term strategy?  Then the COVID outbreak really showed weaknesses in that model and gave business owners a big wakeup call.

Now is a great time to reevaluate supply chains, keeping in mind that there are likely new factors other than cost that need to be included, such as the data and IP security, adaptability, stability, and resilience of suppliers. I would also suggest that factors such as human and labor rights, environmental impact, and ethical business practices be taken into account during these supply chain optimization discussions as well.  We have but one planet and we all need to be stewards to protect it.

Make sure that you are planning for the future and working to mitigate risks in every aspect of your business including the fragility of the global supply chain; it will better prepare you for what certainly will happen next.


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