If managing our supply chains during the pandemic has taught us anything, it’s that speed and resiliency do not go hand in hand. For years, speed has been the holy grail of supply chain management. And that’s unlikely to change. Despite all the business disruption caused by the coronavirus, customers still expect nearly instantaneous delivery, and for many of them, yesterday is not soon enough.
In an effort to whisk products through their supply chains, many companies simplified their sourcing and distribution operations. However, this also limited their options and overall flexibility, which became a huge liability once the pandemic hit. They could not easily pivot to address bottlenecks or product shortages.
Sourcing from distant markets was part of the problem. And while long-distance sourcing isn’t going away, to rely on a single nation—or even worse, a single region of a single nation—is to invite trouble. I am reminded of the supply chain manager who boasted before the pandemic that his company had diversified its production among three different plants but still within one region to make it easier to consolidate shipments. The problem was, those three plants were in Wuhan, China. Of course, when the pandemic hit and the city went into lockdown, his supply chain collapsed.
Many companies responded to pandemic shortages by limiting the number of SKUs (stock-keeping units) they offered. This provides greater control and flexibility in managing the remaining SKUs, while still preserving speed. But streamlining operations while still giving customers the choices they want is a delicate balance.
Finding alternate supply sources closer to home can also promote speed. While initial sourcing may be done overseas, finding a domestic partner—or at least one on the same continent—for replenishments can assure a steady and solid inventory flow.
Having the right supply chain tools also helps. Good visibility software is crucial to managing inventory at every stage of the supply chain. If your partners are not able to provide the kind of data you need to monitor and manage supply, it might be time to find new partners.
While historical data can also help with inventory management, it may prove irrelevant in times like these. It’s difficult to predict how the rest of the year will unfold, and it’s nearly impossible to gauge the long-term effects of the pandemic. If I had to guess, I’d say our lives, at least in many aspects, are changed forever. Which is another reason why we need to strive for resiliency even if it means sacrificing a little speed.