Supply chain management has become a much more important business function in all companies since the pandemic began in February 2020. Let’s frame the issues which have made this executive and management change occur.
The Covid-19 pandemic has been devastating to the performance of both domestic and global supply chains. The disruption, uncertainty, cost escalations, and delays which began in March 2020, continue into the fall of 2021.
The crisis caused by a disturbing and unanticipated imbalance between demand and supply in all world markets has resulted in unprecedented challenges facing all managers and operations personnel engaged in the supply chain, procurement, manufacturing, warehousing, logistics, transportation, customer service, import/export, and sales.
The challenges and their impact extend to all the support functions to supply chains: service providers, freight forwarders, carriers, 3PL’s, technology providers, consolidators, and distributors.
While the supply chain has generally had a “subordinated” posture in most companies, the Pandemic has now elevated this area of responsibility because the consequences of poor performance and failure are so impactful in the success of a business’s margin, profit, growth, and sustainability.
The importance of this area runs equally now to the importance of the supply chain manager, who may be known under the various “Titles” in the organization. Supply Chain, Procurement, Logistics, Warehousing & Distribution, Manufacturing, Materials Management, Demand Planning, etc.
With this “increase in importance”:
The disruption has impacted every company, executive, and business vertical. And we must also acknowledge the consequences to people and their families.
The impact to supply chains has moved up the ladder in every company all the way to the CEO, The Board, and the Shareholders.
In our consulting practice, where 90% of the time we deal with mid-level managers, in the last 20 months, my team and I have met with more CEOs than we have in the last ten years.
Supply Chain Managers and their colleagues have been forced due to the disorder in their business models, to work harder, work smarter and ultimately bring resources, experiences, and capabilities to the benefit of the disruptive impacts of the Pandemic.
Supply Chain Managers have been now tested in areas as never seen previously. Most companies, over time, have seen physical, weather-related geopolitical events impact their supply chains. Negative events happen all the time. While we have had some more notable micro-events in the supply chain in the last 10-15 years:
-The Recession of 2008/9
-Hurricane Sandy in 2012
-The 2011 Tsunami in Japan
-Hurricane Katrina in New Orleans in 2005
-Global Wildfires 2019
-Sichuan Earthquake in China in 2008
-South and Mid-West USA Tornados in 2013
-Mississippi River Flooding 2011
-Northeast Winter Storm in 2018
-The current Covid-19 Pandemic 2020-?
The impact on people, business, and the costs in billions and trillions from all these events is unthinkable. And the challenges that faced businesses and supply chain managers were dramatic.
However, this Pandemic has presented a unique set of circumstances:
-Every country and every person and business are impacted
-Personnel working from home has changed communications, team efforts, camaraderie and in some cases increased effectiveness and performance
-The tenure, now passing 20 months
-The uncertainty of planning out supply chain functions
-Demand Planning is almost impossible
-Lean Manufacturing and “Just in Time” Inventory Management Systems, have been retired
-All business models are being strained resulting in alternative and modified structures
-Managers and staff are working longer hours, becoming “burnt out” is a serious reality
-Hiring has been impaired
-Margins, profits, growth, and sustainability are all being challenged
With all these concerns having been identified as the “new reality” the good news is that many organizations’ talents, particularly in supply chain functions are finding ways to meet these challenges and maintaining their company’s business models to a necessary extent of successful operations.
Supply Chain Managers have become creative in their approach and along with companies like ours, Blue Tiger International, have found solutions to mitigate the impact of the Pandemic.
We have developed 14 Solutions, collaboratively with our supply chain managers. Some of these are:
The new roles and responsibilities of The Pandemic Supply Chain Manager require them to “think-out-of-the-box” and create approaches that were never thought of or utilized previously.
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 profiled above start with an overall assessment of the domestic and global supply chain. That review provides some solutions which must be tied into a financial evaluation that defines ROI.
This is followed by an operational review which determines what changes in the companies supply chain and business model require modification to meet the solution requirements. As an example, if it was assessed and evidenced ROI, the company choosing a Foreign Trade Zone as an option, it is likely changes would be made to the functions of compliance, security, product accountability, technology, and business process.
The last step is implementation, working collaboratively to make the solution work to the benefit of the business model.
This is all unfertile ground to the Supply Chain Executive. What we have observed is a significant “rise to the occasion” of many supply chain personnel, managers and executives to meet and successfully manage these required changes.
They are not necessarily eliminating the issues, but they are providing mitigating strategies all in the name of protecting market share, margins and sustainability.
Supply Chain Managers have become “Frontline Heroes” in the face of this Pandemic and deserve much credit and recognition for keeping supply chains functioning in the face of all these challenges.
This has and will continue to “raise the profile & importance” of Supply Chain Management in all companies’ business models. Additionally, senior management is recognizing their value to the organization, which has been a long-time coming.
Thomas A. Cook is a 30 year seasoned veteran of global trade and Managing Director of Blue Tiger International, based in New York, LA and West Palm Beach, Florida.
The author of 19 books on international business, two best business sellers. Graduate of NYS Maritime Academy with an undergraduate and graduate degree in marine transportation and business management.
Tom has a worldwide presence through over 300 agents in every major city along with an array of transportation providers and solutions.
Tom works with a number of Associations providing “value add” to their membership services and enhancing their overall reach into global sourcing and in export sales management.
He can be reach at firstname.lastname@example.org or 516-359-6232