Question

A real-world example those close to home – the COVID-19 crisis and supply chains Indeed great points. Since we moved to an error of just-in-time shipping supply chains can be critical. What are some of the supply chain issues that have evolved as we work through the COVID–19 crisis.

Answer 1

Just-In time model was great when the workd was normal and there were no supply shocks. With the advent of Covid-19 crisis and restrictions on the movement of products the concept of having enhanced inventory is gaining ground. But since you cannot predict covid-19 situation you cannot prepare for it by stocking more inventory. to go around this problem the following strategies may be considered.

Diversify your sourcing geographies - We know that in the current global supply chain there is an over relaince on china as far as sourcing location goes. This amplifies the risk in during the current situation as the supply is totally cut-off or reduced. In future to manage this problem companies can think of sourcing from multiple locations and even local sourcing the mitigate the effect of situations such as Covid-19.

Visibility - Inventory visibility across the supply chain (plants, warehouses, in-transit, vensors and 3rd party suppliers) become even more critical because this visibility is going to help you assesing the supply sitaution and making decisions on how to mitigate adverse supply situation. Technology becomes even more importatnt in situations like Covid-19. The matra is to invest in technology and enhance the visibility and increase collaboration with you partners.

Manage demand spikes - In this situation it is inevitable that there will be demand spikes of essential goods due to the fear of extension of the lockdown or social distancing norms. In the short term you can halt promotions and restrict the quantity purchased per individual but in te long term predictive algortihms should be leveraged to simulate the demand spike. This also calls for an investment in technology.

Safety - Have an inventory of PPEs during normal times so that you do not have to buy PPEs at exorbitant prices or risk your emplyes with minimal PPEs during situations such as Covid-19. PPEs are especially importatnt for your customer facing workers and those handling deliver or food and beverages. Assuring employees that you have a contingency plan to deal with crisis like Covid-19 will instill confidence in them and will reassure them.