The COVID-19 Aftermath and the supply chain professionals

covid-19 aftermath
The COVID-19 Aftermath and the supply chain professionals

For most of us at home, the typical day starts with clicking on the news channels (that too is if we manage to wrest the remote from our teen who would rather watch a repeat telecast of  “Coffee with Karan“, a more sensible decision if you ask me).

We all agree that at some point in time we will all have to confront reality and look at getting back in action. However, in this case of a Pandemic getting back in action is just not the same as in cases of other natural disasters. As I dwell on this, I see a major difference between the two. A natural disaster is an action in a changed but STATIC environment. Take the case of a devastating flood. Here the incident has happened and the worst-case scenario is before us to act upon and is STATIC. However, the current case like a prolonged war is FLUID. The situation changes day to day rathe hour to hour even minute to minute.

In addition to this, the variances in risks of an extended supply chain that the management professional works with and you have a veritable nightmare, bad enough in cases to paralyze actions especially when you think of health risks.

So what should the supply chain professional do?

Obviously there are no tailor-made steps that would be specific to a type of industry however the below-thought processes may be enough to kick start the resuming of operations in the supply chain. I am laying below some basics facts and tenets which we will do well to keep in mind and act upon.

  1. This too shall pass: This is the most important fact, we professionals must keep in mind every minute and every second. We are flooded with a vast deluge of alarming data. Typically every news channel starts with the total number of infections, rising, and the number of deaths. None mention the cure rate or the rate of rising of the net active cases which to me are more important as these indicate the effectiveness of the fight against this disease.
  2. With every challenge there is a hidden opportunity: we just have to look hard enough. I have written earlier on Linkedin: May the force be with you, I am not really in agreement with the dire predictions of IMF about the worst ever depression coming in. I would have appreciated it more if the IMF would have mentioned what do we do to engage this expected depression rather than voice the innermost fears of most of us. I was greatly heartened when a few days later, I saw an article by Mr. Ratan Tata who in his typical humble understated way took down the IMF for this doom forecast saying human resilience will conquer.

In my opinion, the current Pandemic will result in some unexpected gains. With the current sentiment against China, many Indian companies are better poised for marketing their products that were hitherto difficult with cut-throat prices offered by Chinese manufacturers earlier. The credibility deficit that China faces will further result in an India swing. This is magnified by the way the vast population swung into action in line with the Government’s lightening approach to the pandemic. Curbing infection to 46711 with a 28% recovery rate after 8 weeks in a densely populated country of 1.3 billion is nothing sort of a miracle, add to this the constant updates, apps, and researches, India will be the country of choice. 

There will also be a specific spike in demands of products that have been heavily used in these times like PPE kits, medicines like Hydroxychloroquine, etc. India has not only cured its citizen but dispatched this drug to approx 60 countries to help citizens of other countries. It has again increased the respect for India on a global forum and all developed nations include the US has appraised this initiative.

So what does the SCM professional do?

  1. Prepare Suppliers to start-up operations: Prepare suppliers mentally as well as with respect to their resources to meet the residual demand and unforeseen ones, the moment we open up. This means the supplier must need to know the exact priorities and needs to work on and deliver once he opens up. One should now need to track key people, supervisors, workers, and assess the risks of their return to work. The supplier in turn needs to work similarly with its sub-suppliers if any, to ensure continuity in supplies.
  2. Share startup SOPs with your suppliers: I am sure many of our companies have access to a lot of data on startups, safety precautions. We need to make sure our suppliers have access to the same. Webinars, calls, conferences, and instructions through mails are the way to do it. Simply connect repeatedly with your suppliers, so that you know their fears, doubts, and issues which enables you to help them out.
  3. Analyze the health risk due to the extended supply chain or from the MSMEs and work to mitigate: For me, the most critical period where we must be overly careful is the time when we ramp up production a few weeks after operations start. Many of our suppliers are likely to lose focus on protection, sanitization with the pressure of production. To mitigate this the SCM professional must get into details of supplier’s awareness of handling pandemic impacts, details of their records like a number of employees, thermal scanning, sanitation and hygiene, and many more. It will help him to gauge the risk factor and ensure the safety of his own factory and workforce. The cost of noncompliance is simply too great personally and for the organization to ignore this. There are again two parts. Most SOPs deal with prevention. Take care you have SOPs that tell you what to do when someone is found at risk or infected. A sound plan of action/ infection handling protocol often saves the organization from considerable harm even if a risk becomes a reality.
  4. Look at the transportation too: In all our focus on sourcing, we generally tend to ignore the importance of transport that is the last link between your source and production lines. There is already a scarcity of sea freights to India due to lower economic activity with many freighters giving Indian ports a miss. Airfreight cost has shot up with lesser freights. Though I expect this to balance out, for the short term the SCM professional may take a look at longer lead times of his imports due to lower production in Europe and longer transit time due to queuing of goods. Local transport needs to be analyzed in terms of health risks primarily with care on the fumigation of goods etc.
  5. 5. Inventory: this is going to be a bitterly fought war over the next few months. With lower cashflow, your management is going to push you for better credit lower inventory while expecting you to meet sudden demands. Detailing on what to do and the how cannot be covered in this article ( I can cover this over a later write or address specific queries). All I would say here is you need to pay more attention to inventory especially coming in from Europe and China as these countries have been operating at part capacity at the time we were not. 

In a closing note, I leave you with the famous lines by Theodore Tilton 

This too shall pass away

Once in Persia reigned a King,
Who upon his signet ring
Graved a maxim true and wise,
Which, if held before his eyes,
Gave him counsel at a glance,
Fit for every change and chance.
Solemn words and these are they;
“Even this shall pass away.”

Trains of camels through the sand
Brought him gems from Samarcand;
Fleets of galleys through the seas
Brought him pearls to match with these;
But he counted not his gain,
Treasures of mine or main;
“What is wealth?” the king would say;
“Even this shall pass away.”

Mid the revels of his court,
At the zenith of his sport,
When the palms of all his guests,
Burned with clapping at his jests,
He, amid his figs and wine;
Cried, ‘O loving friends of mine;
Pleasures come, but not to stay;
“Even this shall pass away”

Lady, fairest ever seen,
Was the bride he crowned his queen.
Pillowed on his marriage bed,
Softly to his soul, he said:
Though no bridegroom ever passed;
Fairer bosom to his breast, Mortal flesh must come to clay-
“Even this shall pass away”

Fighting on a furious field,
Once a javelin pierced his shield;
Soldiers, with a loud lament,
Bore him bleeding to his tent.
Groaning from his tortured side,
“Pain is hard to bear,” he cried;
“But with patience, day by day,
Even this shall pass away.

Towering in the public square,
Twenty cubits in the air,
Rose his statue carved in stone.
Then the king, disguised, unknown,
Stood before his sculptured name,
Musing meekly: “What is fame?”
Fame is but a slow decay;

Even this shall pass away.

Struck with palsy, sore and old,
Waiting at the Gates of Gold,
Said he with his dying breath,
“Life is done, but what is death?”
Then, in answer to the king,
Fell a sunbeam on his ring,
“Even this shall pass away.”

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