Recently, in the first part of my blog article series “Supply Chain Risk Management – far more than just a way out of the current crisis“, I highlighted the importance of linking the two disciplines of Risk Management and Supply Chain Management when managing crises. There is another important aspect to not just surviving times of crisis, but to come out of these strengthened. And that is the time factor.
For this reason, the second part of this blog article series is dedicated to the following questions: Where do I start? What ad-hoc measures can I implement to mitigate impact? What can I quickly do to protect my supply chain?
We see it very clearly with our customers, essentially large manufacturers and tier-1 suppliers: Everything in one go does not work. It does not work organizationally. And it does not work due to limited resources. Consequently, companies need to take a step-by-step approach and focus on the most pressing issues first.
Topic No. 1: Staying deliverable
First of all, it is a matter of ensuring our own ability to deliver. Since a large part of the value added in the manufacturing industry is outsourced, a company’s ability to deliver depends to a large extent on the ability of its suppliers to deliver. A supply chain manager must therefore quickly gain a clear overview of which suppliers are affected and to what extent. Are their own suppliers prepared for bottleneck situations? Do they have emergency concepts that they can pull out of theirs sleeves if the worst comes to the worst?This needs to be clarified as quickly as possible.
Our customers use the “Flexible Surveys” tool for structured supplier queries. These inquiries are quick to set up and sent to the entire supplier network. In contrast to e-mail queries, you can evaluated the results in a structured way. In addition, it is always transparent which supplier has not yet replied. Automatic reminders to those whose feedback is still outstanding increase the response rate considerably.
Topic No. 2: Updating and validating obsolete delivery schedules
The next challenge is the handling of outdated delivery schedules. Delivery call-offs and confirmed deliveries are often no longer valid in a crisis, as they no longer reflect actual requirements. Thus, delivery schedules need to be updated and validated as quickly as possible by clarifying with the supplier his production capacities. That is, at a parts or parts group level.
Here, our customers make use of various capacity management tools. These (partially) automatically compare capacities with requirements and visualize deviations, helping to get a quick overview.
Topic No. 3: Maintaining quality after a production stop
If production has been completely interrupted, you need to pay particular attention to quality during the ramp-up phase. Our customers not only use SupplyOn’s quality management solutions to ensure quality when releasing of new parts. These have also proved to be beneficial when restarting after a production interruption. Some of our customers even creatively modified the standard process for this. For example, it is possible to use elements of the APQP (Advanced Product Quality Planning) process to ensure the ramp-up from a quality assurance perspective—as a “mini APQP”, so to speak, but no less effective.
Topic No. 4: Ensuring transport
What applies to a supplier’s production capacity is equally valid for carrier’s transport capacity. In times of crisis, problems arise here, too, for example caused by short-term border closures. These issues need to be made transparent and solved.
In order to stay on top of the competition for transport capacities, it is essential to place binding orders as quickly as possible. For this purpose, our customers can use a transport management system through which they can send committed transport orders for the coming weeks and months to their carriers. Based on this, carriers can then create and confirm reliable transport plans.
With these emergency measures, our customers have taken the first steps out of the crisis. But but these steps mark only a beginning. Now, we have to think long-term and manage risks sustainably. That’s why this series of blog articles, which highlights the numerous aspects and levels of holistic supply chain risk management, will soon continue with the following two topics:
- Which measures and processes make supply chains resilient in the medium and long term, including numerous examples
- What can companies learn from the coronavirus crisis to strengthen their post-crisis position