Supply chain resilience is being severely tested in 2020 with disruptions caused by the covid-19 pandemic, and the crisis will compel companies to rethink their sourcing strategies and, indeed, their entire supply chains, according to Kearney, a global consulting partnership. "The current crisis is exposing vulnerabilities that cannot be addressed with short-term fixes and minor tinkering," says Brooks Levering, co-author of the seventh annual Kearney US Reshoring Index.
With short-term fixes unable to address problems of this magnitude, companies in the future must:
Kearney doesn’t pretend to be able to predict the full extent of the trauma to the economy that the coronavirus pandemic will cause, “but it will be historic,” according to the report.
“At minimum, we expect will be increasingly inclined to spread their risks rather than put all their eggs in the lowest cost basket.”
While predicting disruptions to protect a supply chain is not an easy or a quick fix, Kearney suggests the following:
“Companies can protect their supply chains by tracing back needs from customers to suppliers. Your suppliers require real-time monitoring of inputs, and you’ll need daily updates to manufacturers on stock levels, inventory, deliveries, and priorities.”
Moving forward, companies’ rapid response to such emergencies should evolve into “creating plants to restart operations and retrain your workforce if necessary. Lessons learned during the crisis should be codified to inform future work as you grow your business.”