Plan for now and for the future.
How to respond in an efficient and proactive way?
Even with the immediate toll on human health, the economic effects of the Corona-crisis are coming into sharp focus and attention. Businesses must respond on multiple fronts at once: they need to work at the protection of their workers’ safety and must safeguard their operational viability and adapt their Supply Chains at the same time.
Many businesses are able to mobilize rapidly and set up crisis-management mechanisms, ideally in the form of a war room. The typical focus is naturally short term. How can supply-chain leaders also prepare for the medium and long terms—and build the resilience that will see them through the other side?
Where to start today and how to prepare for the future?
1) Create transparency on multitier supply chains, establishing a list of critical components, determing the origin of supply, and identifying alternative sources.
2) Adjust the demand history so the decrease in sales has a minor effect in demand planning. A crisis may increase or decrease demand for particular products, making the estimation of realistic final-customer demand more difficult and more important. Supply Chain should question whether demand signals received from their immediate customers, both short and medium term, are realistic and reflect underlying uncertainties in the forecast. You have to develop a demand-forecast strategy, which includes making risk-informed decisions beside the use of forecast techniques. Make sure you ensure dynamic monitoring of the forecasts in order to react quickly to inaccuracies in a war room session or in your S&OP meetings. For sure you will have regular changes.
3) Based on the adjustment of your demand forecast, you should optimize production and distribution capacity. Scenario analysis can be used to test different capacity and production scenarios to understand their financial and operational implications.
4) Estimate required inventory along the value chain—including spare parts and after-sales stock—to make sure you can produce and deliver. You will have to change some of your planning policies and/or inventory parameters which enables your MRP planning and other Supply Chain Planning.
5) Identify and secure your critical supplies. Be aware that you will suffer from the Bullwhip effect, but so will your suppliers. This will impact your supply for the coming months. Anticipating, acting and communicating properly will be key.
6) Identify and secure logistics capacity, estimating capacity and accelerating, where possible and being flexible on transportation mode when required. Share the information with your logistics stakeholders.
Where can we, Xeleos Consulting and Optimact, help you?
Based on our knowledge and experience in the domains of Supply Chain Planning and our Cloud based tool Optimact we are more then confident we can help you. We already provide this service for our existing customers with built in scenario’s in Optimact to run, monitor, react on the above mentioned topics in order to enable our customers to move very quickly based on the updates in relation with the COVID-19 disease. On a regular base we organise conference calls to bring all knowledge together and react to the changes supported by our tool Optimact properly.
Of course, we offer the same services to any companies, even those not using Optimact. We will use the same principles as explained above.
If you need more information on our approach and more importantly what this could mean to your business, please contact us: info@optimact.com.
