The way out of Covid-19 Lockdown.
The series of lockdowns have caused most companies to rethink their supply chains.
Getting businesses up and running once the lockdown is eased will not be straightforward. There are basic questions that need to be asked and additional thinking is needed to ensure supply chains are adapted for the new future.
Alignment of Objectives.
Depending on the impact of COVID-19 on your existing business you may well need to develop a new business vision for the future, which will require change programmes to be mobilised across the whole of your business and communicated across the workforce.
It is essential, however, that any strategic changes are underpinned by shared and aligned business objectives. When diving out of a crisis such as COVID-19, it is so necessary to have real transparency of objectives, data and decision making across the company. Think about how you get the operating management to work closely together with clear objectives set by the Board, as this will ensure that the business team will be that much more effective.
Importance of the Supply Chain.
One clear priority in any post-COVID-19 business review must be consideration of the supply chain. How did it perform in the crisis? How appropriate is it to the post-COVID-19 future? What lessons have we learnt that need to be incorporated into a future design?
At one level and in one definition, the Supply Chain is the aggregation of all the channels used to get goods, packaging, ingredients, or subassemblies to a manufacturing plant then get the products to the warehouses for sale and distribution to customers whether these products come from your manufacturing unit, or a wholesaler or are simply purchases from another manufacturing plant.
In the new future, giving your supply chain more resilience, (when a disruption occurs), will require businesses to have full end to end control of their supply chain. This means integrated and aligned complementary processes.
It will be important that individual businesses functions do not optimise their own processes to the detriment of another. For example, manufacturing wants long runs for ‘lower costs’, which result in higher finished goods stocks and stock-outs at the same time. Procurement wants large purchases for ‘lower prices’ resulting in high component stocks. Distribution wants full lorries resulting in longer order-delivery times.
Working across the traditional organisational silos will help bring about an end to supply chain control. It will make businesses able to react more effectively, quicker and with better information and data.
It is not a deliberate set of actions by individuals that results in major inefficiencies in the supply chain. It is only when one can oversee the whole chain that real success is possible.
It is difficult to assess the risk of supply discontinuities, for whatever reason, and the company’s ability to react if a holistic picture of the company’s supply chain is not available.
In many companies, running the business as a joined-up set of supply-chain processes are already producing good benefits in terms of cost and efficiencies. Departments that were once ‘silos’, concentrating on their own goals and their external customers, are beginning to understand the effect that they have on the efficiency of other departments in the business. Supply Chain Directors help to keep the focus right down the chain.
Sales managers help with the forecasts and know that over-forecasting brings additional stocks with the problem of write-off or write-down of un-useable stocks for whatever reason. In the retail trade, merchandisers understand that over-ordering leads to greater volumes of ‘sale discount or markdown products.
Manufacturing managers are beginning to understand that over-production of one product leads to a counter-intuitive problem. You end up with higher warehouse stocks of what you do not want to sell now, yet lower stocks of what you do want to deliver as you are selling them.
Distribution has to deliver right first time, or the accounts department has to cope with invoicing problems or Sales have a disgruntled customer. That usually means that the money does not come in when it should.
At Bisham Consulting we have been assisting our clients with their supply chain challenges for over 30 years and our consultants are all previous senior managers/Directors in the logistics, manufacturing, and retail industries.
Covid-19 has presented a new set of challenges for us all and we would like to support you in any way we can.
If you would like to talk to a Consultant about your supply chain call us on +44 (0)1628 487000 or email: email@example.com