Lessons Learned From Pandemic Supply Chain Disruption

Not so long ago, it seemed every new start-up reveled in describing itself as a “disruptor.” The word implied shaking things up, finding new business models, and creating new ways of reaching consumers or users. But the pandemic brought back more traditional, more problematic shake-ups. Let’s look at some lessons learned from pandemic supply chain disruption.

Your Suppliers Are Your Lifeline—Treat Them Well

Small suppliers of high-demand parts and materials can only respond to so many orders at a time; abandon them at your peril. When the supply of unique parts or rare materials is scarce, small suppliers can choose to do business with partners who respect them and treat them well. Don’t throw your weight around. Show your suppliers you value your relationship when times are good, and they’ll remember when things get tight.

Digitize

Forward-thinking businesses are constantly improving communication and collaboration. Yet in the supply chain area, too many companies are stuck on paper in a digital world. Cloud computing can facilitate information sharing at critical points in your supply chain.

Everything Needs Chips

Everyone has heard about the shortage of microchips. Demand for cars, phones, and computers soared during the pandemic, while labor shortages and lockdowns established to protect public health made it difficult to meet that demand. Looking forward to the holiday season, retailers are already anticipating shortages in electronic toys—and a possible boom in retro toys without electronics. The chip squeeze can also apply to major appliances, televisions, and anything else with “smart” in its name.

Inventory Management Has Changed

The essence of inventory management is knowing where your stuff is, how much of it your customers need, and predicting how much to keep available. In the pandemic, businesses that kept additional inventory on hand fared better than those that practiced extremely lean inventory management. One of the lessons learned from pandemic supply chain disruption is don’t get caught short. Anticipate your customers’ needs and have a backup or disaster plan in place with the inventory to handle it.

Diversify and Decentralize

Diversification in sourcing materials and widening distribution became necessary during the pandemic. Businesses that put all their eggs in one basket suffered when lockdowns in China meant manufacturing ground to a halt. Others already had contingency plans and were able to pivot quickly to other manufacturing plants located in Thailand, Vietnam, and India.
Supply chain management and logistics have shifted to a world where unpredictability may be the new norm. Businesses that are nimble and that can build flexibility into their supply chain operations will be better positioned to thrive in a permanently pandemic-altered landscape.