Role of supply chains in navigating a pandemic
By Maha Bouzeid, vice president and head of sourcing at Ericsson Middle East and Africa
The coronavirus pandemic continues to transform the way we live and work whilst disrupting businesses across the world. As company leaders and health officials track the virus and make decisions regarding its containment, supply chain leaders assess and plan for how the virus will impact their systems.
Limiting the impact on your supply chain
When it comes to supply chain management, a little preparedness goes a long way. Investing resources and time upfront to reach a minimum level of preparedness can significantly improve outcomes for when an unprecedented situation occurs, minimising the impact on people and infrastructure.
Currently, supply chain leaders are creating transparency and building rapid-response capabilities to mitigate the short-term fallout from the crisis. All of Ericsson’s main production sites are currently up and running.
Ericsson has a global supply chain set up, which ensures the company works close to customers through its European, Asian and American operations. Our main production facilities are in Estonia, Poland, China, India, Brazil, Mexico and the US.
At this time, there is an urgent need for us and other supply chain leaders to monitor and prepare for the impact on their value chain.
As a company, we continue to follow the situation of the Novel Coronavirus and recommendations from the local authorities and WHO, as the company assesses its supply chain. Our prediction remains for Q1, that we will see limited to no impact on our customers. For Q2 2020, our assessment remains that we can cover currently forecasted demands, taking into account known implications and expected outcome from mitigations made following the outbreak.
Ten actions businesses can take to address
We focus in this post on the ten actions businesses can take to resolve the immediate challenges that the pandemic presents to supply chain workers, business partners, and operations. These include:
- prioritising high-risk suppliers by geography, sector, commodity/business value
- analysing the supply chain beyond Tier 1 Suppliers to understand exposure to affected countries
- building inventory around own stores to reduce impact from port delays
- not relying on forecasted data or current stock levels
- calculating the stock tolerance over the predicted ‘at risk’ period
- keeping communication channels open with key suppliers
- seeking alternative supply and transportation routes
- factoring in increased transit time to alternative ports
- reassessing travel plans and use digital technology (i.e. teleconference)
- calculating any additional costs, such as non-delivery to customers
Now more than ever, maintaining the flexibility of our supply chains is essential for limiting disruption to services. With creative, resourceful responses to the pandemic, supply chain leaders can ensure that consumers have access to services they need while also maintaining the health and safety of both consumers and supply chain workers.
For us, this involves working even more closely with our suppliers to understand their challenges, mitigation plans and how we can support them. It also means closely aligning with our own organisation and our internal stakeholders, to encourage, listen, support, and motivate each other, so that when the crisis is over, we can emerge stronger than ever.
Most importantly, the lessons from this challenging time can help us make our supply chains more resilient and prevent any future challenges from causing as much disruption.