A ‘ready-to-run’ program for restarting a global supply chain after the covid-19 disruption
Counter to traditional supply chain approaches, the restart of a global supply chain after a shutdown requires a back to front assessment. Before a demand driven approach can be used again, the state of each trading and logistics service partner needs to be established and assessed.
Since Covid-19 first caused an extended shutdown in China, where a number of suppliers are located, many brands in markets around the world worked hard to restart production and organize supply as restrictions are lifted. Just at the time when suppliers started to ramp up production, the wave of infections reached markets around the world. This caused a major drop in demand, which in turn led to a shutdown of supply and markets. As a consequence, products and materials are in different locations around the world. Raw materials to finished goods are scattered along different stages of the global supply chain, sitting in trading, logistics service partners or internal facilities.
So, what do you need to do? Our “ready-to-run” program has two main thrusts:
- Rebuilding relationships which are affected by the cancellation of many purchase orders
- Understanding the state and status of each part of the global supply chain
We, at ebp Global, recommend the following outline of assessment areas in our program:
- What is the state of relationship with each key supplier?
- What is the financial situation of each key supplier?
- What are the raw material positions at tier 1 and tier 2 suppliers?
- Can those raw materials still be used?
- If there are semi-finished goods at tier 1 suppliers, can those still be used?
- What is the capacity and production situation at tier 1 and tier 2 suppliers, are they in shutdown, still operating and at what level?
- What is the situation of cancelled purchase orders with tier 1 suppliers?
- How many goods were in transit and where are they located?
- Are carriers operating? What are the latest vessel schedules? Are containers available?
- Are the departing ports open?
- Are the receiving ports open?
- What is our finished goods position in internal warehouses and 3PLs?
- Are warehouses full or can they receive goods?
- Are 3PL’s operating and have spare capacity to receive and ship goods?
- Which markets are open and what level of supply chain restrictions are in place?
- Are customers operating and able to receive goods?
- What is the forecast and order book situation for each market and region?