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Now more than ever, the supply chain is critical.
Companies need to supply goods and services quickly, safely and securely—especially to those at risk of infection or who are working at the frontline of the medical response, such as life sciences companies developing COVID-19 tests and treatments.
While meeting this unprecedented demand, companies have a responsibility to protect the health and welfare of their employees, their supply chain workers and the wider communities they operate in, while maintaining the required flow of products and materials.
As part of our COVID-19 thought leadership series, Managing the human and business impact of coronavirus, our report, COVID-19: Building supply chain resilience, offers a guide for organizations to create responsive, adaptable and intelligent supply chains that will build resilience for the future.
Impact on the value chain
Today’s supply chains were not built to be easily switched to a state of effectiveness and responsiveness, especially in a time of stress where customer and product segmentations are changing so rapidly.
Global value chains are being severely impacted along all dimensions:
- Suppliers face significant challenges in distributing supplies, e.g., quarantine and trade restrictions. Consumers are concerned with traceability and source country of products.
- Manufacturing: Factories are in quarantine and some production plants totally shut down. There are production challenges due to lack of raw materials availability.
- Logistics: Travel restrictions affect airports, roads, trains and ports. Extra time is needed for potential special screening and cleaning of shipments. There are potential market closures, and carriers are suffering from a shortage of drivers and driver man-hour restrictions.
- Sales: Consumer demand is shifting away from stores to online and prioritizing “need” vs. “want” purchases. Stores are closed or have shortened hours, with mass inventory depletion due to panic purchases.
- People: Quarantine measures cause labor shortages and temporary unemployment. Workers prefer to stay/work from home or in quarantine and those in service industries are unable to do so. Concerns over people's health cause a reduction in productivity.
A roadmap to navigate disruption
A continuous cycle of risk mobilizing, sensing, analysis, configuration, and operation will help businesses navigate supply-chain disruption, now and into the future:
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Helping create supply-chain resilience
Here are a few examples of how we’re guiding our clients to supply-chain resilience:
- Pharmaceuticals: To help address an anticipated demand surge in procurement operations, we are helping this company identify an approach to supporting their command center and response activities.
- Global retailer: Facing a shutdown of their fast fashion retail outlets, this company turned to us for an approach to help ensure that online demand could be fulfilled from their warehouses. Additionally, we are helping with plans, processes and capabilities to improve near-term and longer-term operations agility.
- Personal Hygiene products: To help this manufacturer address the current surge in demand for personal hygiene products, we are helping the company shape an approach to achieving real-time visibility and tracking of incidences/actions through the formation of a logistics command center and control tower.
- Telco services provider: As this company prepares to launch a new service in which quarantined COVID-19 patients can be monitored virtually, we are helping develop a holistic approach for project management, establishing hubs for distance monitoring as well as secure data analysis.
- Solar power manufacturer: Facing inventory challenges, warehousing costs and uncertainty in global and inland transportation routes, we are discussing approaches to develop a logistics control tower to identify risks related to logistics restrictions and provide insight for planning and production.
- Consumer goods company: To address challenges in demand visibility of the e-commerce channel, manual scenario planning and lack of cross-functional communications and alignment we are building end-to-end supply chain visibility assets, dashboards as well as evaluating a suite of analytics tools to improve segmentation, demand sensing and scenario planning.
- Automotive components manufacturer: Our initial project focused on inventory reduction to free up capital and fuel growth. Given the current crisis, our work has shifted to identifying an approach to improve inventory visibility, development of an analytics capability, raw-material supply management and planning solutions for work in-progress and finished goods inventory.
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