Supply chain management has become a much more important business function in all businesses since the pandemic began in February 2020. Let’s frame the issues that have caused this change in leadership and management.
The Covid-19 pandemic has had a devastating effect on the performance of national and global supply chains. The disruption, uncertainty, rising costs and delays that began in March 2020 continue until fall 2021.
The crisis caused by a disturbing and unforeseen imbalance between Offer and demand in all global markets has brought unprecedented challenges facing all managers and operating personnel involved in supply chain, sourcing, manufacturing, warehousing, logistics, transportation, service customer, import / export and sales.
The challenges and their impact extend to all supply chain support functions: service providers, freight forwarders, carriers, 3PLs, technology suppliers, consolidators and distributors.
While the supply chain has generally had a “subordinate” position in most companies, the pandemic has now elevated this area of responsibility because the consequences of poor performance and failure have a huge impact on the success of a company’s margin, profit, growth and sustainability.
The importance of this area also now goes to the importance of the Supply Chain Manager, who can be known by various “Titles” in the organization. Supply chain, procurement, logistics, warehousing and distribution, manufacturing, materials management, demand planning, etc.
With that “Increase in importance”:
The disruption has impacted all businesses, executives and verticals. And we must also recognize the consequences for individuals and their families.
The impact on supply chains has climbed the ranks in every company to the CEO, board of directors and shareholders.
In our consulting firm, where 90% of the time we deal with middle managers, over the past 20 months my team and I have met more CEOs than we have had in the past ten years.
Supply chain managers and their colleagues have been forced, due to the mess of their business models, to work harder, work smarter, and ultimately bring in resources, experiences and skills. capacities for the benefit of the disruptive impacts of the pandemic.
Supply Chain Managers have now been tested in areas like never seen before. Over time, most businesses have seen physical geopolitical weather-related events impact their supply chains. Negative events happen all the time. While we have had more notable micro-events in the supply chain over the past 10-15 years:
-The 2008/9 recession
-Hurricane Sandy in 2012
-The 2011 tsunami in Japan
-Hurricane Katrina in New Orleans in 2005
-World Forest Fires 2019
-Sichuan earthquake in China in 2008
-Tornadoes in the South and Midwestern United States in 2013
-Mississippi River Flood 2011
-Northeast winter storm in 2018
-The current Covid-19 2020 pandemic-?
The impact on people, businesses and the billions and billions of costs of all these events is unthinkable. And the challenges facing businesses and supply chain managers were dramatic.
However, this pandemic presented a unique set of circumstances:
-Every country and every person and company are impacted
-Staff working from home changed communications, team efforts, camaraderie and in some cases increased efficiency and performance
-The tenure, which is now 20 months
-The uncertainty in the planning of supply chain functions
– Demand planning is almost impossible
-The “Lean Manufacturing” and “Just in Time” inventory management systems have been withdrawn
-All business models are put to the test, resulting in alternative and modified structures
-Managers and staff are working more hours, becoming “toast” is a serious reality
– Hiring has been compromised
-Margins, profits, growth and sustainability are all called into question
With all of these concerns identified as the ‘new reality’, the good news is that the talents of many organizations, especially in supply chain functions, are finding ways to address these challenges and maintain the business models of many organizations. their business to the extent necessary for successful operations.
Supply chain managers have become creative in their approach and, together with companies like ours, Blue Tiger International, have found solutions to mitigate the impact of the pandemic.
We have developed 14 Solutions, in collaboration with our supply chain managers. Some of them are:
The new roles and responsibilities of the pandemic supply chain manager require them to “think outside the box” and create approaches that have never been considered or used before.
At Blue Tiger International, we become an extension of the Supply Chain Manager’s resources and provide a business model to evaluate these options and apply them to the uniqueness of their business models and supply chains.
The four steps outlined above begin with an overall assessment of the national and global supply chain. This review provides solutions that must be linked to a financial assessment that defines return on investment.
This is followed by an operational review that determines what changes in the company’s supply chain and business model require modification to meet the requirements of the solution. For example, if return on investment were assessed and proven with the company choosing a foreign trade zone as an option, it is likely that changes would be made to the compliance, safety, product liability, technology and management functions. business process.
The final step is implementation, working collaboratively to make the solution work for the benefit of the business model.
All of this is not very fertile ground for the Supply Chain Executive. What we have observed is an important “live up to the opportunity” for many supply chain staff, managers and executives to meet and successfully manage these necessary changes.
They don’t necessarily eliminate the problems, but they do offer mitigation strategies in the name of protecting market share, margins and sustainability.
Supply chain managers have become ‘front line heroes’ in the face of this pandemic and deserve a lot of credit and recognition for keeping supply chains functioning in the face of all of these challenges.
This has and will continue to “raise the profile and importance” of supply chain management in the business models of all companies. In addition, senior management recognizes their value to the organization, which is long overdue.
Thomas A. Cook is a seasoned 30-year veteran of global commerce and Managing Director of Blue Tiger International, based in New York, LA and West Palm Beach, Florida.
The author of 19 books on international trade, two trade bestsellers. Graduated from NYS Maritime Academy with an undergraduate degree and a graduate degree in Shipping and Business Management.
Tom has a worldwide presence through more than 300 agents in all major cities as well as a range of providers and transportation solutions.
Tom works with a number of associations providing “added value” to their member services and improving their global reach in global sourcing and export sales management.
He can be reached at [email protected] or 516-359-6232