How to Manage Supply Chain Management (SCM) During Coronavirus Disruption

When its about Supply Chain Management, a little preparation-in-advance can take you a long way!

The full outbreak of the coronavirus in the world is leading to a great deal of information being shared among different companies in the supply chain. As well as discussing the implications of this virus, there is now an opportunity to discuss how to manage the supply chain during the disturbance.

The companies who are following this event will have an opportunity to improve their process in both supply and manufacturing. Here, PPS will be exploring how to manage the supply chain during the disruption and also how to improve a company's profit margins and productivity.

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Here are some of the worth-discussing ideas related to managing supply chain during Corona pandemic:

Opt for Greater Use of Automation Tools

Regarding how to manage the supply chain during the disruption, companies are looking at how to better develop their processes for managing supply. For example, some of the ideas put forward by PPS include: greater use of automated tools and advanced automation; increased automation of operations at all levels; enhanced production and distribution capabilities; improved data collection and management; increased transparency along the value chain; and tighter control and surveillance of the overall supply chain. All of these ideas are meant to be effective during the disruption and as well as how to achieve these improvements during the disruption.

Here’s how Nikos Andriotis (eLearning Industry, Supply Chain Management Challenges, and How to Solve Them) has to say about optimizing the supply chain to maximize opportunities:

“Understanding the global trade lines, and the ways that they apply to your company's products and roadmap is an important skill. It allows you to optimize a supply chain, to take advantage of emerging opportunities, and to know how and when to expand to a new market.”

Follow Business Intelligence Tactics to Achieve Improved Workflow

Business intelligence is one way of achieving a better workflow during the disruption. Improved automation will help to reduce the amount of time spent during the production process. For example, a system that automates the production line is likely to see a reduction in the amount of time defined for producing one product. This then results in an increase in throughput (the ability to deliver products faster). Increased throughput will benefit both the manufacturer and the end-user.

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Better Up Production & Distribution Capability

Enhanced automation increases the quality of the finished product as well as reducing its cost. The end-user will benefit from reduced distribution costs as the process does not have to travel along the value chain to the distribution point. The manufacturer will benefit from increased production capacity as the systems that were not up to the task of handling the volume of products can now handle the additional production.

Overall, the level of productivity will also improve during the disruption. It is likely that companies will also have an opportunity to utilize updated systems. For example, if they have an existing solution that is not able to be automated, the manufacturers could seek out a solution that is able to replace it. In order to enhance productivity, companies should look at new processes, equipment, and software. PPS concludes that all of these items are ideal for increased productivity during the disruption.

Maintain Increased Transparency Through Multitier SCM System

The level of transparency along the value chain will also improve during the disruption. For example, the companies could introduce a new software program that will allow them to identify where production and distribution are suffering the most. The problems could then be taken care of by addressing those issues. Alternatively, the companies could use a smaller scale campaign to address the issues directly.

Improved System of Cash & Net Working Capital

Overall, there are also opportunities for companies to improve cash and net working capital. In order to minimize the impact of the disruption, it is likely that companies will be able to increase the amounts of money allocated to stock-outs, as well as the amount of cash allocated to the risk and available for R and D. In addition, the amount of cash and net working capital allocated to inventory during the disruption will also be reduced. This will improve both the efficiency and profitability of the company.

As explained by Marilyn Gettinger (Thomas Net, Supply Management vs. Supply Chain Management):

“SCM offers the supply professional improved total cost of ownership numbers, suppliers and supplier management, new ways of managing inventory, and earlier risk warning signals. The supply professional has several opportunities within SCM for leadership and significant contribution to revenue and profit growth in their organizations.”

Companies have the opportunity to adapt to the disruption that is taking place during the disruption. The most imperative of all the things to do is to ensure that the information that is being shared is also being used correctly; that’s what PPS focuses the most on. This should turn into an opportunity for companies to take advantage of this opportunity by sharing more information with all of their stakeholders. In order to effectively implement the ideas outlined above, companies will need to bring together their suppliers, their manufacturers, and their trade representatives.