No longer taken for granted: Supply chain resilience returns to prominence

The coronavirus (COVID-19) pandemic has shone a spotlight on the importance of resilient supply chains. Assumptions about the work that goes on in the background to provide next day delivery or fresh produce were challenged by supply shortages and empty shelves. It’s an age old problem. Supply chains are taken for granted when they work, and scrutinised when they don’t. Now with public awareness high, companies are having to state how they’ll ensure resilience and protect against volatility.

Our figures suggest an above average possible fall in economic output of more than 37% for the industrial manufacturing sector. So as we assess the impacts of one of the most disruptive events in recent history, what challenges do companies face when resuming  supply chains? And with Brexit swiftly approaching, how can they ensure issues identified during the pandemic don’t happen again? 

Resuming supply chains and planning for Brexit

For those that stopped production entirely in the face of COVID-19, resuming operations with so many question marks will be challenging. You’ll need to take a well choreographed approach so you can return to efficiency, manage resupply and importantly, not break your balance sheet. 

You’ll also need to assess the operational readiness of your extended supply of service, and whether your physical workforce is available and prepared. And you’ll need to understand the frequently evolving policy and legal restrictions and liaise with government to work through these as we emerge from lockdown. 

As businesses reopen, you shouldn’t use historic sales trends to forecast future demand. There’ll be psychological implications for consumers, who may be hesitant to return to shops and will demonstrate different buying patterns than we’ve seen before. You may need to review operational plans frequently and be flexible as we navigate new territory. 

Making the process easier

So how can you make managing your supply chain easier? There are five areas you should focus on: 

Remove potential production issues: Prepare now for the return of full capacity and production - the change from 2-metres to 1-metre plus social distancing should make this easier. Have engineering complete line tests and resolve any potential issues that could force you to shut down again. 

Start small and then build: Remove complexity where possible. If you previously had a wide product range, review what’s driven revenue and margin and assess the new demand. A simple range reduces changeovers that cannibalise capacity.

Communicate early: Get in contact with tier 1, 2 and 3 suppliers so materials are readily available. Assume they understand their risk profile and geographical supply access, to avoid build delays to your timelines. Keep in mind they may be reviewing their own supply chains to ensure they’re not dependent on a single country or region and how this might impact you.

Keep an eye on the numbers: Monitor your stock levels across supply chains so you can prioritise production to match and address stock issues before they become serious.

Don’t run before you’ve walked: It can be tempting to try and return to pre-pandemic supply levels, but it’s better to start slow and scale up than go too fast. Doing so could mean running into issues which cause customers to lose trust at an already sensitive time. Run at low utilisation until you’re comfortable you can maintain pace.

Added scrutiny, but also opportunity

The impact of COVID-19 has demonstrated the innovation possibilities for companies. Under pressure they quickly adapted to meet demand and provide essentials, manufacturers switching to PPE production and supermarkets rapidly scaling up their home delivery capability for the vulnerable. 

In order to prepare against future issues and increase resilience, companies should apply this innovative mindset to their supply chains. Take a fresh look at those plans you shelved for a later date and what emerging technologies could benefit your operations. Focusing on increasing resilience and planning for Brexit whilst the experiences of the pandemic are still front of mind may mean you’re better prepared should you face such disruption again.

Contact us

Cara Haffey

Cara Haffey

Private Business Leader, Northern Ireland & Automotive and Manufacturing Leader, PwC United Kingdom

Tel: +44 (0)7809 551517

Suzanne Jenkins

Suzanne Jenkins

Digital Supply Chain Lead, PwC United Kingdom

Tel: +44 (0)7715 211155

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