Business Strategy 3 Ways to Protect Your Supply Chain in a Pandemic
The COVID-19 pandemic has revealed a lot about how, as a society, we weren’t prepared.
It’s frightening how quickly it swept across the world, how many people have become ill and how many have died.
In a lot of places, it has stressed medical systems. Many hospitals are over capacity. Cities, like New York and Houston in the US or Toronto here in Canada, have had to quickly build temporary hospitals to cope with the surge of hospitalizations.
I feel for and salute the heroic medical personnel and all those involved in the herculean effort of caring for the ill.
I look around to see businesses struggling to stay afloat, with too many already having gone under. Unfortunately, few seemed prepared to withstand the economic shock caused by a global pandemic or agile enough to quickly shift.
Many say this event is an anomaly—how often have we heard, “these are unprecedented times”— but I’m beginning to see reports that there are other potentials for future pandemics.
Now we might not be able to stop a pandemic, but we can mitigate one of the primary causes of disruption for many companies: the loss of a supply chain.
Prior to COVID-19, many companies had their go-to suppliers that gave them the products they needed, but they had no back-up—they didn’t need one! However, once the pandemic hit, they couldn’t supply their customers because they couldn’t get the goods.
I think many of us experienced this in our personal lives too: certain products were hard to find on the shelves. They were either in short supply or the demand increased faster than they could be supplied (like hand sanitizer).
If a business doesn’t have the supply to meet the demand, the customer will look for an alternative. Once they’ve found another solution for what they need, they might not come back at all. This can have disastrous consequences for a company.
Since we know that the next disruption could be right around the corner, it’s imperative for us to rethink our supply chains.
Here are three things we should be doing right now to better protect our businesses:
- We need to diversify our supply chain. We should have more than one or two suppliers, especially if they’re international.
- As much as possible, we should work with and maintain suppliers within our own region. That might mean the costs will be higher, but we’ll have more control. Plus we’re supporting the local economy and that benefits us too.
- We need to make sure that all our suppliers aren’t getting their goods and materials from the same area. If that area is hit, it doesn’t matter how diversified our supplier list is, the result will be the same.
I believe that much of the economic turmoil we’re facing was caused by supply chains that were too small and too remote. The pandemic just served to expose the weak supply models of many companies. The key is a diverse and local supply.
Going forward, business leaders need to make plans to mitigate the effects of the next disruption, whatever that may be. Those that have learned from this terrible event will be the ones who understand that increasing the strength of their supply chains is critical to future-proofing their business.
Disruptions are guaranteed to happen. The question is… What are you going to do about it?