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Ramp-Up your Supply Chain

Ramp-Up your Supply Chain after COVID-19

T

he COVID-19 crisis sent shock-waves through boardrooms across the globe. The flow of global supply chains slowed or stopped within the first few weeks of 2020, and the crisis continues to unfold. Most companies are trying to find their way through these challenging times due to unexpected disruptions. On the other hand, some businesses are preparing for recovery and ramp-up for the not-too-distant future.

Most companies build their supply chain systems and processes for normal operations. These are not designed to handle extreme disruption and recovery. The question becomes — how do you plan and execute a ramp-up plan given the tremendous unpredictability on supply and demand?

“Strategy Planning, Digitization, and Modeling for future demand will be critical elements in building more durable, smarter supply chains and ensuring a lasting recovery”

–  io-group

Ramp-up and recovery plans should be influenced by how the pandemic unfolds in the near future. Three critical scenarios need to be considered to develop practical insights into the range of possible outcomes and determine your ramp-up path to recovery.

  • Worst Case : pessimistic
    If nothing changes soon, there could be a prolonged period of social distancing and stay at home orders. This will have a significant impact on resource availability, supply and demand channels, and consequently, the productivity of the manufacturing and distribution industries.
  • Best Case : optimistic
    If the pandemic is controlled and reduced, life could start to return to normal. In this case, pressure on the supply chain will increase significantly, from transportation to warehousing. Supply Chain businesses will begin scrambling to ramp up activities.
  • Most Likely : realistic
    In the most likely scenario, the crisis will peak in different regions at different times and varying magnitudes. This situation will bring the opportunities to ramp-up business but with some caution based on the time and geographical area.
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Keeping the three possible outcomes in mind, consider these when planning a ramp-up and business recovery process for your supply chain.

Strategy Planning

Determine how to ramp up capacity by focusing on sales and operational planning. You can start by allocating the available stock in inventory to products that allow you to meet immediate consumer demands. On the logistics side, roadways are relatively less impacted by this crisis (barring resource availability). When compared to airways and waterways, trucking is seen as a critical mode of transport — consider exploring different options to transform existing network routes.

Digitization

The COVID-19 crisis is an opportunity to reset and revitalize a system that has functioned on outdated processes. Digitizing the buyer-supplier relationship will make identifying and recruiting new suppliers far less time-consuming. Cloud-based solutions enhance quality and speed up decision making by utilizing Industry 4.0 technologies like AI and IoT. This is crucial when businesses start seeing a surge in demand once restrictions are relaxed, and consumers start buying again in larger quantities.

Example of project management schedule

Modeling for Future Demand

Logistics will be the first to be affected once markets start to open up. While the crisis has had less impact on roadways, it will face a challenge to handle the sudden rise in demand. Book logistics capacity as soon as possible. If your business is global, focus on the East. The Asia Pacific region is expected to have the largest logistics market size post COVID-19 (source: Research and Markets).

Whether it is in the short or long term, you should anticipate significant supply chain restructuring. The fundamental difference between a company that thrives or merely survives is the resiliency of their supply chains to handle global, not only local, disruptions by achieving visibility into their supply chain and planning for many different futures.

“Investments in supply chain resilience can deliver a 15% to 25% improvement in plant output and a 20% to 30% rise in customer satisfaction.”

–  Bain & Company

io-group specializes in helping you plan, improve, and manage your supply chain. We have consultants that specialize in lean practices, IT implementation, and project management.

Let us be your independent resource in safely navigating this crisis!

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