COVID-19 & Beyond: Strategic Initiatives Essential for Supply Chain Management
In the efforts to end the COVID-19 pandemic, the world saw an unprecedented process to quickly research, develop, test, and deploy a vaccine to protect against the COVID-19 virus. But like many other facets of life, the pandemic also exposed problems within drug and medical supply manufacturing. Global supply chains were disrupted leading to shortages of medical devices, medicines, and personal protective equipment.
During these unprecedented times, manufacturers are tempted to redesign their supply chain management strategies to combat the supply chain issues the pandemic has created. Although redesigns to supply chain strategies may be necessary during these times, care should be taken to avoid long-term negative effects.
In most cases an entire redesign of the supply chain management is unnecessary. Focusing on the proper development and implementation of these six initiatives will enhance your supply chain performance during COVID-19 and beyond.
DIVERSIFICATION OF THE APPROVED SUPPLIER LIST (ASL)
In the days before the COVID-19 pandemic, manufacturers were disciplined in managing the number of suppliers within their ASL. Manufacturers had made efforts to “lean up” their ASL to mitigate cost and logistics. Although these pre-pandemic practices are an accepted approach, the “lean” supply base approach has placed significant limitations on the supply base during the pandemic. Unprecedented supply chain interruptions, and even cessation, have placed ‘single-sourced’ supply chains at higher risk than previously assessed. When expansion to the ASL is considered, manufacturers should take the time to reevaluate their supplier selection criteria and supplier risk mitigation requirements currently established. These restrictions, when combined with crisis reactivity, tend to impose excessive requirements, and hinder the supplier selection process. However, with the proper evaluation and monitoring techniques, you can still add suppliers to your supply base and be “lean.”
ADDRESS UNDERPERFORMING SUPPLIERS
Where previously the normal expectation of determining how to deal with underperforming suppliers presented a challenge, the disruptions to the supply chain already caused by the pandemic make for an even higher level of strain on supply operations having a significant impact on supply availability. Excessive product rejects and returns along with delivery delays have critical detrimental effects on the manufacturing supply. Proper and frequent evaluation of the supplier’s performance is essential in mitigating supply issues. It is good practice to evaluate your suppliers more than once a year and to properly react to an underperforming supplier. Combined with strategic efforts in diversification, true supplier partnerships that bring clarity and understanding can provide invaluable intelligence in pipeline and contingency planning to potentially alleviate overstressed supply chains.
Start with a complete list of all the possible Workstreams impacted. Next, work with each Workstream to discuss and define the scope of work gain consensus when a particular Workstream is determined to be not applicable. A project manager can help determine a clear Workstream structure. This structure definition manages the overall integration project through an “Integration Playbook.” This playbook assists in providing scope clarity as well as clear and consistent communication through a determined communication plan.
COMBINE MATERIAL CHARACTERIZATION WITH EXISTING DESIGN FOR MANUFACTURING (DFM) PROGRAMS
A robust Design for Manufacture process is critical in supporting the supplier with proper information so they can effectively deliver the product on time and in conformance. In the current COVID-19 impacted environment, delays in shipping due to a lack of specificity in requirements can manifest in seemingly unmanageable longer lead times. Too many times this process is overlooked or minimized causing undue frustration for both you and the supplier. These frustrations inevitably lead to delays from proof-of-concept engineering builds to design transfer, and potentially all the way through product realization and delivery. Partnering your engineers with Suppliers to appropriately characterize requirements can lead to better specifications communication and allow both parties to have a better understanding of supply capabilities and manageable timelines.
RE-EVALUATE YOUR SUPPLY CHAIN MODEL, ADVANCED PLANNING, AND SCHEDULING PRACTICES
In pre-pandemic days, the established stability of supply and demand provided for a supply chain model that worked well. Then it suddenly wasn’t working. Re-evaluating the business supply chain model as part of a revisitation of Disaster Recovery & Business Continuity Risk Management is not only prudent but likely a necessary reality for the future. It is more important now than ever to have a lean and effective production planning system in place. Production planning is a critical process that must be mastered to ensure sustainability. Techniques used such as (bottleneck management, global management, pull system, etc.) make it possible to avoid exceeding delivery times, minimize the risk of stock shortages and maximize the use of human and material resources. Software supporting Enterprise Resource Planning (ERP)/Material Requirements Planning (MRP) is proven to be invaluable in supporting planning and scheduling. The combination of a new, modified, or hybrid, supply chain model alongside planning, and scheduling can potentially not only provide relief in the near term but minimize the impact in the future of unplanned event scenarios.
ENSURE YOUR MATERIAL PRODUCT ACCEPTANCE CRITERIA IS REALISTIC
In many cases, the product acceptance criteria imposed on the supplier are either too stringent or unnecessary. Over design of the product acceptance criteria can cause unnecessary delays in the production and delivery of the product. In the current recovery from the pandemic, it is possible these limitations you have placed on a supplier are the difference between on-time delivery and delays. Even during pre-pandemic operating times, this was difficult to mitigate, and a subject usually avoided. However, working in partnership with the supplier directly and applying process capability techniques, and risk mitigation strategies, product acceptance criteria can effectively be characterized realistically, which in turn can result in increased on-time deliveries.
ENSURE PROPER SUPPLIER COMMUNICATION
It is crucial to have good communication with the supplier. This sounds simple enough however, a lot of companies just write the purchase order and hope the product comes in on time. Constant communication before, during, and after a PO is given is essential for good supplier performance. The challenges associated with supply chain uncertainty during the past year in dealing with COVID-19 have made continual and clear communication between your supplier management team and your suppliers even more critical today.
