Minimizing the Coronavirus Impact to Supply Chain
Globally, all governments are working with health organizations and private corporations to stop the surge of the Coronavirus, “Covid-19”. The shipping stoppage from Asia, as well as the numbers of infected, quarantined, or absent labor is having a massive, widespread, and crippling effect on corporate supply chains. These problems waterfall downward through multiple supply chains, even damaging companies who don’t directly source materials or products from China but rely on partners and suppliers who do. Many of these shortages are unavoidable, and some are a result of weaknesses in sourcing and Asset Lifecycle Management strategies that could have been corrected years ago.
The reports on how the pandemic is affecting supply chains and disrupting manufacturing operations around the world are scary and coming in daily from some of the best-known brands on earth. The bad news? Over April and May, it could get even worse, causing these well-known brands to slow down critical network infrastructure build out and management, not to mention their supply to the customer base. CAPEX, OPEX, Sales, and the bottom-line EBITDA are all going to be impacted.
Obviously, the companies feeling the pinch the most are those which receive the bulk of their supplies from factories in China. The momentum of these Chinese manufacturers has come to a stop and will continue to be sluggish for months. In general, there are best practices you can have in place that reduce the impact and risk of disruption and improve your supply-chain-resiliency factoring. You can monitor suppliers 24/7, you can source from multiple suppliers (75%–25%) rather than one. You can map suppliers’ manufacturing, warehouse, and distribution sites to make sure they’re not all in the same country or area. You can purchase insurance to cover lost profits from some disruptive event at critical manufacturing sites. You can work with sole-source suppliers to map out alternate sources. You can do all of those things religiously, but you will not be covered in instances like Covid-19, where supplies just… stop cold. While supply chain managers are bracing for things out of their control - the disruption to continuity of operations worldwide, there ARE steps they should be taking immediately to help mitigate the damage.
One major problem in supply chain resiliency plan is that there are usually large quantities of parts, equipment, and valuable assets that are actually available, but are unknown to management. These are spare components that could have been located and utilized, but with a lack of visibility, insight, and control of geographically dispersed assets, Supply Chains are beyond inefficient – they are blind. A best practice for this is to:
1) Ensure you have a perfect Field Data Collection solution systemically built into your operations, from the field to the warehouse. This asset tracking allows for spares management, and reduces hoarding, theft, fraud, or mis-use.
2) Ensure that your Field Data Collection solution is integrated with your critical corporate enterprise systems, so your centralized database of record is as accurate as possible.
3) Leverage your accurate data! This means verification of known assets, purification of data for connected business systems, and the ability to visualize & analyze the data for accurate decision making, reporting, and control.
Fulcrum can help with your spares management, across all company locations. We know how to implement perfect Field Data Collection for accurate asset data. We integrate with all major business systems to ensure data sharing across the entire company. We give you the tools to empower your analytics.
For more information how Fulcrum can help systemically help your supply chain in these uncertain times, please visit www.Fulcrum.net today, or email Info@Fulcrum.net.