Avoid Pandemic-Related Disruptions with a Flexible Supply Chain Strategy
Unlike other natural disasters, pandemics such as COVID-19 require a more flexible approach to overcoming supply chain challenges and keeping your supply chain intact.
Nature often tosses us curveballs. Be it hurricanes, blizzards, or other multi-day weather events; both major and minor natural disasters usually translate into a few days disruption of supply chains. In some cases, even a few weeks.
The business interruption, however, is minimal - contained either locally or regionally. Even large scale disasters leave large swaths of your supply and warehouse network untouched. A well organized and readily prepared business is thoroughly equipped to weather almost any storm.
What do you do when that storm can't be forecasted, predicted, or quickly remediated? Or when it moves beyond something local and explodes nationally or globally? When it effectively shuts down society, as is happening with the COVID-19 pandemic?
Unprecedented in modern times, COVID-19 is testing the resolve and preparedness of companies, both large and small. How do you avoid or, at the very least, minimize disruption to your business to ensure it remains intact when we return to normalcy?
Let's take a look at the basics of a pandemic disruption and a few critical considerations to make to ensure your business comes out of it healthy.
How does a pandemic differ from other disruption events?
Unlike more commonly occurring natural disasters, pandemics do not follow set, predictable patterns.
Consider for a minute a hurricane churning in the Gulf of Mexico. Even without knowing the exact point the storm will come ashore, you can make preparations for your business five, ten, fifteen days ahead of time.
First, you know that any of your southern operations may see an impact from the storm. Damaged warehouses, slowed transportation, downed utilities. From moving inventory to adjusting schedules to rerouting shipments, you have time to make necessary accommodations to keep your business out of harm's way. And, after taking the initial precautions, you can make adjustments as the storm's ultimate impact becomes clearer.
Pandemics move differently, and far more unpredictably. As opposed to a hurricane, where you're just tracking one storm, a pandemic involves every person and every place a virus might infect.
Look at how COVID-19 has spread and where the hotspots eventually popped up. At a global level, it's most devastating path led it from China to Italy to the United States to Spain. The outbreak could have happened differently, taking a completely different course through entirely different countries.
Here in the U.S., Washington state proved COVID-19s main point of entry - or at least the first time it was widely reported. Since that moment, the hotspots have included California, Louisiana, and New York, with West Virginia being the last state to report a confirmed case.
A pandemic moves as people move. It can make its impact known quickly or overwhelm a population more slowly.
So how do you ensure your supply chain, and more importantly, your business survives something that seemingly moves at random? It starts with being as fluid and flexible as the situation itself.
Stabilize supply chains away from affected areas
Your preparedness ultimately depends on the extent of your logistics network - both the one you actively employ and the one you can call upon in times of need.
In our hurricane scenario, you know exactly - or at least have a good idea - where the disruption will occur and can take steps to mitigate the impact on your business. With a pandemic, the situation is harder to pin down, which requires your business to be prepared to make changes at a moment's notice.
A critical factor in the ability to make changes is with real-time monitoring of your supply chain. If you don't have that capability, you need it now. You can get ahead of how the pandemic might shape your supply network. With COVID-19, for example, the developments have been akin to floodwaters flowing down a river. In essence, the first areas to flood are also the first to begin their recovery.
Initially, hard-hit states like California, Louisiana, and New York - where early COVID-19 case numbers snowballed - were the first to issue shelter in place or quarantine orders. They also placed a limit on what businesses could operate and when.
If your supply and logistics networks were concentrated in these states, without contingency plans or secondary supply chain relationships to lean on, your business could suffer. With secondary connections in states like Florida or Texas, which largely avoided the first wave of disruption, your business could maintain normalcy by tapping into those networks. You could keep your supply chain moving forward and meet your fulfillment obligations.
However, understanding how those floodwaters crest and then recede can also limit the length of disruption your company might have to endure. Those same states that took the initial COVID-19 hit will also be the first ones to start bringing normal operations back online. For instance, if you abruptly diverted your supply chain from Louisiana to Texas, the need may arise to redirect it back as Louisiana begins its recovery, and Texas endures its pandemic peak.
For future planning, if you've eliminated suppliers in the past to promote more nimble, strategic operations, it might be a good time to revisit those relationships. Assuming everything was left on good terms, you can keep your supply chain stable by staying one step ahead of the disasters and then quickly returning to your normal operations once the worst of it passes.
This thinking applies to every aspect of your fulfillment - from materials to manufacturing to procurement to inventory management. Having a robust contingency plan for every aspect of your business can ensure that just because operations in one area shut down doesn't mean the rest of your business shuts down too.
Explore flexible labor policies and procedures
If there's one thing that the COVID-19 pandemic has exposed is the fragility in our workforce. Our current predicament is not just in dealing with individuals who are getting sick, and therefore unable to work, it's also limiting the movement of healthy individuals and their capacity to work.
If you're not prepared, it can prove catastrophic for your company.
To protect your employees and your operations, information is critical. Educate your employees - and suppliers and vendors - about symptoms of the virus and how to protect yourself. Develop policies that avoid you having to take reactionary measures, and instead have clear procedures that keep everyone on the same page.
Have guidelines for taking sick leave if an employee develops symptoms. If forced to reduce working hours, work out a schedule ahead of time - or at least before it's put into practice, so employees understand expectations and the thinking behind it.
Not just for now, but in the future, for those who have roles that can be done at home, take steps to ensure that the transition can be made in a day, not a week.
If your warehouse and logistic staff is one you employ in house, limit the potential for infection by adjusting shifts and creating cleaning and disinfection procedures.
All of the above are of particular importance if your products are considered essential or will be in high demand due to everyone staying home. Most critically, though, it can mean the difference between your business succeeding or failing in difficult times.
What COVID-19 may ultimately teach us is the need for our businesses to be more flexible than at points in the past. It's vitally important if that business is heavily dependent on a supply chain, warehousing, logistics, and transportation - areas susceptible to disruption in times of crisis.
By building contingency plans for all aspects of your business, you put yourself in the best position possible to weather the storm - regardless of what type of storm that might be.
Matthew Rickerby is the Director of Marketing at Skubana, the leading solution for multichannel, multi-warehouse D2C brands. For the past ten years, he’s covered e-commerce topics ranging from SEO to supply chain management.