Part 3 of "The New Supply Chain" blog series by Mike Loquercio, Manufacturing and Supply Chain Management Expert.
As we watch the supply chain reaction to the crisis, we should applaud the efforts of those companies that have accelerated their re-engineering efforts to supply the health care resources when demand exceeds supply. Imagine that we can take a company that manufactures baseball jerseys and within a few days they are using the fabric to produce masks. We have seen high school students and colleges use their STEM/engineering resources to convert the 3D printers to produce face shields.
We have countless stories showing innovation and creativity, that manufacturing and the supply chain can deliver rapid changes. We will “reinvent” the supply chain during this crisis and for the future, pandemic will be a section within every business continuity plan.
What have we learned:
- Overall inventories are too low – YES – lean and continuous improvement drives that result but the statistical models were never designed to address the shifts in demand patterns and accelerated replenishment needs we are seeing.
- We will continue the debate with “off shore” or “outsourcing” for quite a long time – this will not change overnight and will create significant challenges when companies look at capital planning, capacity planning and reinvestment in current domestic assets.
- Flexible, rapid and responsive will be the KPI’s for every future supply chain.
- Vendor/supplier selection will now include conversations around “backup” capacity and BCP planning.
- Planning tools will get smarter, faster and more collaborative – the use of shared data and “big data” will become the standard for delivering a world class supply chain.
- We need to invest more resources, capital and technology to the supply chain – it can’t be an afterthought for our future – disruptions will happen again and again……………
Beyond normal capacity planning, we hope that manufacturing now includes conversations about how to re-purpose assets – brainstorm what else could you produce using your raw materials, WIP, technology/processing and manufacturing assets.
The supply chain must have a seat at the table – no debate! Supply chain cannot sit in the back of room any longer and be relegated to lower tier status.
We have no playbook for the future – we have the chance to throw out all the old assumptions and business practices and “re-invent” the supply chain. It’s exciting to think about the future potential – to watch academics and business partner to lead change, drive thought leadership and challenge the status quo.
I would challenge every executive, every business owner, every professor and any participant in the supply chain process to commit to change, to be a champion of the supply chain for the future – WHY – it’s easy once you move past a disruption/crisis to not take advantage of the lessons learned, it’s often easy just to go back to the old ways and the standard work.
We can make a difference! NO – replace that comment – Supply Chain will make a difference!
Read part 1 of the series: The New Supply Chain: Pandemic
Read part 2 of the series: The New Supply Chain: Rebalance
About the author
Mike has spent over 30 years in the food and food packaging space working as an engineer, operations and multi-plant manager along with supply chain and logistics roles. He has worked with CPG companies - Walmart, Target, and Costco along with food service, grocery processor and distribution accounts. He also has extensive order to cash business systems implementation experience with SAP/JDA.